Why Trust and Reputation Drive Growth and Investment
Just yesterday, a Financial Times TikTok video came through my timeline where Markets Columnist Katie Martin and US Financial Commentator Robert Armstrong talked about Warren Buffett.
Right at the beginning of the post, Katie comments on how Buffett looks at good companies for a good price, before Robert adds that he also looks for “a management team that I trust.” Just that one word, Trust, unlocks attention. Everything there is about trust.
Today, we are living in a volatile and information-rich environment where trust has emerged as a critical asset underpinning reputation, enabling investment, and fueling long-term growth. On the subject of trust, Warren Buffett also said the following when he and his team are looking at investments:
“We’re looking for three things when we hire people or invest in companies: intelligence, energy, and integrity. And if they don’t have the last one, don’t bother with the first two.”
Buffett’s perspective is not just philosophical one, it serves as a strategic lens through which investors and stakeholders assess organisations before deploying capital, especially at scale.
Yet, the concept of trust amongst leaders is often misunderstood. It’s seen as a tactical asset that is built and managed at a tactical rather than at a strategic level, even though what decision-makers and senior stakehodlers seek is assurance that an organisation and it’s leadership have the capability and trustworthiness to lead, execute their vision, report transparently, and act with integrity amidst uncertainty.
Reputation as a Strategic Asset
Trust is the foundation upon which businesses build relationships with employees, customers, investors, and regulators. In 2025, 93% of business executives agree that trust directly improves profitability, while 94% reported facing challenges in maintaining it, a sharp increase from 2023. This dichotomy highlights a critical gap: organisations recognise trust’s value but struggle to operationalise it.
Consider the consequences of failing to bridge this gap:
42% of executives cite customer disengagement as a top risk when trust erodes, while 38% highlight profitability declines.
Trust is not a static metric but a dynamic force that shapes market perceptions. For instance, the Edelman Trust Barometer 2025 reveals that 61% of the global population hold grievances against businesses and governments, with distrust correlating to reduced consumer spending and investor hesitation.
Reputation reflects how trust is perceived externally, shaping the views of investors, regulators, partners, employees, and consumers. A strong reputation reduces negotiation friction, boosts stakeholder confidence, and accelerates capital flows. Conversely, a tarnished confidence and reputation can stall deals, invite regulatory scrutiny, and increase operational costs.
The 2025 Edelman Trust Barometer also revealed a continued and significant shift towards the grievance-based society that we are experiences and which is marked by economic fears and a pervasive belief that systems are unfair and institutions aggravate these issues. This sentiment has led to election upsets in major Western democracies and criticism against business involvement in social issues. Key concerns include job loss due to automation and globalisation, stagnant wages, widening trust gaps between income brackets, and fears of discrimination.
Trust in institutions has become alarmingly low, with deep-seated grievances causing zero-sum mindsets. To counter this, the four major institutions, businesses, NGOs, government, and media, must work together to rebuild trust, deliver competent governance, and provide reliable information, fostering a sense of control and positive societal change.
The Cost of Losing Trust
Trust is arduous to build but easy to lose, and the repercussions are substantial. Warren Buffett, again, said:
"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”
For as much as businesses today try to gain trust and manage how they are perceived, recent data shows that 7 in 10 people believe government officials, business leaders, and journalists deliberately mislead them by saying things they know are false or gross exaggerations. This erosion of trust among traditionally reliable figures underscores the fragility of institutional credibility.
And real-world examples abound:
Wirecard: The collapse of this fintech company due to fraudulent accounting practices led to a significant loss of investor trust.
Boeing: The 737 Max crisis, which I’ve written about before, was exacerbated by communication missteps, resulting in brand erosion and financial losses.
Facebook (Meta): Privacy concerns and data breaches have led to continued regulatory scrutiny.
These instances demonstrate that when trust erodes, so does value, rapidly and often irreversibly.
Building Trust Strategically
Organisations often misconstrue trust as a by-product of good work. This is a mistake. In reality, trust must be strategically cultivated through alignment across three core pillars:
1. Strategy and Leadership Integrity
Strategic clarity and authentic, values-driven leadership enable stakeholders to align with an organisation’s mission. Leadership must consistently demonstrate alignment between words and actions.
As BlackRock CEO Larry Fink emphasised in 2022:
“Stakeholders are pushing companies to go beyond disclosure and demonstrate how they are living their purpose.”
Leaders must integrate reputation and trust into strategy development, extending beyond public relations and investor relations.
2. Culture and Internal Communication
Trust originates within the organisation. Employees serve as the first line of reputation. A culture rooted in transparency, empowerment, and ethical decision-making projects outward. If there is a negative culture at the top, then that will permeate throughout the organisation.
McKinsey’s research indicates that companies with healthy cultures are three times more likely to achieve total shareholder return above their industry median.
This underscores the importance of systems reinforcing accountability, values, and employee voice.
3. Strategic Communications and Stakeholder Engagement
Trust is as much about communication as it is about action. Leaders who prioritise proactive, two-way stakeholder engagement outperform their peers. Strategic communications should focus on:
Listening mechanisms to inform action
Message discipline and transparency
Regular updates, especially during uncertainty
Companies excelling in this area, such as Microsoft, Patagonia, and Unilever, build ‘permission capital’ with stakeholders, earning the benefit of the doubt during crises.
Trust as a Growth Multiplier
Trust is not a cost centre but a revenue driver. Deloitte’s research shows that a 10% increase in societal trust boosts GDP growth by 0.5% annually, translating to $40+ billion for economies like Brazil. For individual firms, this manifests as:
Higher Employee Productivity: Trusted teams achieve 15–20% efficiency gains through collaboration.
Accelerated Innovation: R&D investments yield 30% higher returns in high-trust environments.
Resilient Investor Relations: Firms with strong ESG ratings attract 20% more capital inflows during downturns.
When trust is embedded, organisations experience tangible benefits:
Accelerated Decision-Making: When trust is established, investors, regulators, and partners act more swiftly.
Enhanced Valuations: Companies perceived as well-governed and ethical command premium valuations.
Crisis Resilience: Trusted companies recover more rapidly and retain customer loyalty during crises.
A Harvard Business Review study found that high-trust companies outperform low-trust ones by:
286% in total return to shareholders
76% in employee engagement
50% in productivity
These are not marginal gains; they are transformative, which many public or private organisations dream about.
A Strategic Playbook for Leaders
For C-suite leaders, board members, and senior government officials, embedding trust and reputation into organisational DNA is mission-critical. Here is a strategic playbook:
Step 1: Diagnose Your Trust Position
Conduct a comprehensive trust audit across stakeholders, internal and external. Assess perceptions of leadership, performance, communication, and purpose using tools like:
Employee surveys
Investor perception studies
Stakeholder interviews
Media and sentiment analysis
Step 2: Integrate Trust into Strategic Planning
Apply a trust lens to every strategic decision:
Are actions reinforcing or undermining trust?
Do actions align with stated values?
How do key stakeholders perceive us?
Trust considerations must be integral to strategic board-level discussions.
Step 3: Communicate Transparently and Authentically
In an era of scepticism, communications must be clear, values-driven, and responsive:
Prioritise openness and understanding, even when conveying bad news
Equip leaders to engage authentically, with empathy and humility and beyond the spreadsheet
Foster long-term relationships with media, regulators, and investors
Step 4: Prepare for Crises Proactively
Trust is tested during crises. Organisations that prepare in advance, with scenario planning, crisis response teams, and rehearsed communications, preserve reputational capital.
EY’s Global Crisis Survey indicates that organisations with crisis plans recover trust more swiftly and limit brand damage.
Step 5: Measure Reputation and Trust
Implement dashboards to monitor:
Media coverage and tone
Stakeholder trust indices
ESG ratings and performance
Social media sentiment
Employee and customer Net Promoter Scores (NPS)
What gets measured gets managed—and funded.
Trust in the Public Sector
For governments and public institutions, trust is foundational. The OECD reports that trust in government correlates with higher compliance, better service delivery, and greater societal cohesion. Without trust, policies are ignored, investments stall, and social resilience weakens. Therefore, civil service reforms, public-private partnerships, and international investment pitches must be built on credible, transparent, and strategically communicated trust.
Trust as a Strategic Imperative
We are living in an era marked by economic fears and institutional scepticism; trust and reputation are not optional but strategic imperatives. Leaders must proactively cultivate trust to unlock investment, drive growth, and build resilient organisations.
As Warren Buffett’s legacy demonstrates, trust is not just about ethics, it’s about economics.
I advise a wide range of organisations, including governments and investors on how to position themselves and sharpen messaging, and build resilient reputational capital that supports long-term value creation and stakeholder trust.
If you’re looking to modernise your communications team so that it is ready to tackle the growing threat of deepfakes and reputation challenging issues then, I would welcome a conversation.
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