Africa’s business leaders now have a clear mandate from consumers and society to work with governments and civil society organisations to limit the fallout from Covid-19 and accelerate the continent’s development.
In the age of consumer and employee activism, those that get it right could meaningfully enhance their reputations and the long-term growth of their organisations. On the other hand, consumers will likely punish companies whose executives are perceived to be solely focused on maximising profits.
The 2021 Edelman Trust Barometer shows that communities across Africa are looking to CEOs to speak up about societal challenges and to offer solutions. This comes as the Covid-19 pandemic fuels concerns about job security and the quality of public services such as healthcare and education, among other worries.
The 21st annual Edelman Trust Barometer, which measures trust as a function of competence and ethics, is based on nationally representative surveys conducted through October and November 2020. In Africa, the study focused on South Africa, Nigeria and Kenya.
The survey found that African citizens generally place far more trust in business than in government – with the trust gap between the institutions being significantly wider than in other regions.
While consumers are growing increasingly wary about misinformation on all fronts, CEOs are considerably more trusted than government leaders.
As such, the vast majority of respondents in Africa believe that when their government is absent or ineffective, business must step in and fill the void. Our data suggests that partnerships are an effective way to foster trust, meaning that business leaders should use their position of relative trust to collaborate with civil society organisations and government to effect change.
This resounding mandate to do good is partially a reflection of the continent’s immense developmental needs.
The Trust Barometer shows that African societies want CEOs to actively take the lead on change rather than waiting for government, and most respondents think CEOs should hold themselves accountable to the public and not merely to the board of directors or shareholders.
Furthermore, over 90% of respondents say CEOs should publicly speak out about pervasive challenges such as job security, inequality, gender-based violence, local community issues, and global movements including Black Lives Matter.
Business executives can no longer shy away from these matters and need to be sincere when speaking up about them, with their sentiments backed up by visible action. We call this ‘action communications’, whereby companies and their executives ‘do, say and advocate’. This means that in establishing themselves as credible voices and advocates of change, corporates first need to change themselves for the betterment of society.
To execute on this expanded mandate, businesses are expected to give both consumers and employees a seat at the table as external and internal activism grows.
Consumers and employees have undoubtedly woken up to the fact that activism works, with countless examples of successful campaigns in recent years. African consumers have particularly high expectations of business leaders – they are more demanding than their peers in other regions.
Company executives – particularly those in consumer-facing industries – can no longer operate as though they are detached from society. CEOs need to listen closely to their employees and consumers, and cannot afford to remain quiet on issues affecting local communities and society at large.
These profound shifts have been partially fuelled by new demands from investors, including that corporates prioritise environmental, social and governance (ESG) considerations, and by the Covid-19 crisis, which has led to widespread job losses in Africa and abroad.
The fact that society is entrusting businesses and CEOs with driving positive change is both a threat and an opportunity for companies operating in Africa. Corporates can either build on this position of strength or squander it, with real implications for their own long-term growth.
Those that get it right will temper overall business risk and display better employee and customer retention rates over time.
One of the many knock-on impacts of this new reality is that CEOs have additional responsibilities and an expanded remit, and may therefore need to develop new skills and refine others, including empathy. To attract the right talent, future-minded organisations may increasingly tie executive remuneration to social outcomes.
Ultimately, we believe that the extraordinary levels of trust placed in African business leaders – particularly relative to trust in government – means companies have a responsibility towards the public to be a force for good. The need to have a corporate purpose broader than the company itself has never been greater.
While this adds new risks to the general operating environment, the benefits linked to this new dynamic far outweigh the risks of standing on the sidelines.