Trust or reputation? What matters most?
Updated: 1 day ago
Why trust has become a defining metric of organisational resilience.
Today's audiences are increasingly judging organisations by trust, and by the behaviour they expect when no one is watching. A good reputation is no longer enough.
Distrust: a leading indicator of vulnerability
The absence of trust – or worse, the presence of distrust – is often an early indicator of reputational vulnerability because, while reputation reflects past performance, trust guides stakeholder expectations about how an organisation will behave in the future.
And while reputation accumulates slowly over time, trust moves fast. The contrasting pace means reputation damage can take time to surface, whereas trust can be dismantled quickly if people perceive breaches of integrity, broken commitments, or behaviour that contradicts stated values. In fact, polished 'reputation-building' narratives can do more harm than good if people assume that an organisation's actual behaviour behind closed doors doesn't match up.
Low-trust or distrust environments can result in stakeholders losing confidence, employees disengaging and customers quietly looking for alternatives. And, to make matters worse, any major organisational misstep in a distrusting environment will have a disproportionate reputational impact, marked by a longer road to recovery and closer scrutiny. A situation Australian banks and supermarkets know all too well.
And then there's the flow-on effects. In their work on crisis contagion and crisis spillover, Laufer and Wang describe the psychological tendency for people to make 'guilty by association' judgements in a crisis, filling in gaps with assumptions when they don't have clear, timely, or trustworthy information. If one organisation is seen as untrustworthy, and another is connected to it in some way (e.g. by industry, partnership, supply chain or technology), audiences may assume the second organisation is also untrustworthy, even without evidence.
Trust and resilience
When trust exists, it shields organisations from backlash, issue escalation, and long‑term reputation erosion. It can also help organisations better navigate incidents, crises and 'guilty by association' judgements because people are more likely to expect they will do the right thing. AKA 'the benefit of the doubt effect'.
According to Roy Morgan, trust recovery after a crisis can take up to five years, with the speed of recovery shaped by the trust and credibility established before the crisis, and the way the organisation (and sometimes even the wider industry) responds to the issue itself.
The Edelman Trust Barometer shows that trust is a reputational asset and one of the strongest predictors of long‑term organisational resilience. Organisations that preserve trust through transparency and credible behaviour retain customers, avoid reputational erosion, and maintain permission to grow, even under scrutiny.
BCG’s Trust Index shows that trust is directly tied to long‑term organisational resilience and financial performance and highlights that vigilance is needed because trust deterioration is a precursor to reputational crises. Organisations with high trust deliver materially higher shareholder returns, while trust breaches are corrosive to revenues and culture, and recovery is slow and difficult.
Does this mean that trust alone determines reputation in the long-term? Far from it.
Reputation still requires active management because of the range of external forces that can distort it. Media narratives, political and social commentary, competitor claims, historic performance, and external events all shape reputation in ways trust alone cannot counter.
The evolving role of communications and corporate affairs
More than ever, communications and corporate affairs functions need to operate right at the heart of an organisation, both as trust architects and reputation stewards – influencing the present and protecting the organisation’s long‑term licence to operate. This means deeply understanding audiences, ensuring behaviour consistently meets expectations, and shaping the narrative.
To external audiences, this is achieved through:
Credible, transparent engagement: Explaining how values guide decisions in practice, offering clear reasoning behind choices, being explicit about what is known and still evolving, publishing data where possible, and providing early information during times of ambiguity to prevent speculation.
Behavioural visibility and consistency: Showing how the organisation behaves when not in full view, demonstrating consistency across contexts, and making clear how internal behaviour aligns with external narratives and commitments; reinforcing trust through actions and messaging.
Navigating issues, crises and scrutiny with accountability: Responding simply and directly, showing how lessons learned translate into changed behaviour, maintaining timely, factual communication, and owning errors quickly with clear corrective action.
Within the organisation, this is achieved through:
Early insight into emerging risks and expectations: Identifying early warning signs, monitoring shifts in stakeholder sentiment, addressing emerging narratives before they harden, and surfacing behaviours or decisions that could undermine trust or reputation.
Influencing decision‑making and culture so behaviour matches promises: Ensuring the implications of decisions are considered early, encouraging consistent behaviour and aligning actions and policies with stated values – especially in moments not visible to stakeholders.
Preparing for and responding to issues and crises: Acting as an early detection system for escalating issues and guiding leaders through crisis communication that prioritises trust.
Aligning the organisation around a coherent narrative: Building messages that resonate with contemporary expectations and positioning the organisation and its leaders on matters of strategic and reputational importance.
Elevating internal communications beyond information distribution: Ensuring internal reality matches external messaging – recognising that if employees don’t trust the organisation, the public won’t either – and preparing leaders to communicate with staff empathetically, credibly, and with accountability.
Building trust while protecting reputation is best achieved by communications and corporate affairs functions that sit at the centre of strategy and organisational decision‑making – guiding leaders when the stakes are high, keeping a real‑time pulse on stakeholders, proactively (re)positioning narratives as sentiment evolves, and navigating issues and missteps with judgement and intent.
Trust governs how people interpret what they cannot even see. As a start, leaders should be asking themselves: if no one were watching, what decision would I make, and what truth does that reveal about who we truly are as an organisation?
