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Trust Drives Investment Decision-Making

By Randi Morrison posted 12-11-2018 06:55 PM

  

Edelman's second annual Trust Barometer Special Report: Institutional Investors, based on a September/October 2018 online quantitative survey of 500 institutional investors (100 each from US, UK, Canada, Japan & Germany), revealed thought-worthy findings, particularly for public companies seeking to understand the leading factors that will build - and engender trust and strengthen their relationships with - their investor base.

Noteworthy findings include:

  • 65% strongly agree that actively engaging the investment community on corporate governance matters impacts trust of a company when considering investing in or recommending an investment.
  • 92% (93% US) of respondents will support a reputable activist investor at one of their investee companies if they believe change is necessary, and 87% (83% US) say their firms are more interested in taking an activist approach to investing.
  • 98% say companies should take a public stand on one or more social issues - with cybersecurity, workplace diversity, and national security topping the list.
  • 95% of investors (89% US) say maintaining healthy company culture has an impact on trust, and 95% (91% US) say enforcing a corporate code of conduct at all levels of the company has an impact on trust.
  • 94% of investors (and 94% US) agree they must trust a company's board of directors before making or recommending an investment, and 95% of investors say an engaged & effective board is important (58% say "very important") when considering whether to invest in a company

One caveat based on an observation of the survey demographics (page 2): 70% of respondents were male and 30% female. Assuming a more diverse respondent pool, based on other surveys that identify results by gender (e.g., PwC's 2018 Annual Corporate Directors Survey), it's quite possible the survey results would differ.  
 

           See also Edelman's release and Top 10 Insights. This post first appeared in last week's Society Alert!

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