Forget ‘License to Operate’: Businesses now must earn ‘License to Lead’


We don’t trust business leaders and government officials to tell truth, according to the 2013 Edelman Trust Barometer. However, public trust in business, government and NGO’s has risen since last year. Edelman said that one of the glaring results of the annual survey, released ahead of the World Economic Forum in Davos, was that while 50 percent of respondents trusted business in general to do what is right, only 18 percent trust business leaders to tell the truth. The results for government were similar: 41 percent trust government to do what’s right, but only 13% believe their leaders. So we believe in our institutions, but not the people who run them.

The research also confirms the democratising trend of recent years – the transfer of influence from traditional authority figures such as CEOs and prime ministers toward employees, peers and people with credentials such as academics and technical experts.

Edelman’s conclusion: Running a profitable business and having top-rated leadership, alone, no longer cuts the mustard. These operational-based attributes have become expected. Today, businesses must build trust by treating employees well, exhibiting ethical and transparent practices and placing customers ahead of profits, while of course delivering quality products and services.

According to the report: ‘Businesses must embrace a new mantra: move beyond the License to Operate, the minimum standard, toward earning a License to Lead in which businesses serves the needs of shareholders and broader stakeholders by being profitable and acting as a positive force in society.’

Download the Executive Summary here.