2011 Edelman Trust Barometer: South Korea Insights

2011 Edelman Trust Barometer

Edelman Trust Barometer at a glanceEleventh annual study5,075 people in 23 countries of which 200 in South KoreaAges 25 to 64College-educatedIn top 25% of household income per age groupin each countryReport significant media consumption and engagementin business news and public policyAPAC Select Countries: India, China, Japan, South Korea,Indonesia, Singapore, Australia (China N=375 aged 25-64; All others N=200aged 25-64) 2

State of TrustShifting center of gravity

South Korea most trusting of NGOs; least trusting of business Trust in Institutions Global Asia Pacific S. Korea 100% 90% 80% 70% 64% 62% 62% 62% 61% 61% 60% 58% 54% 53% 50% 51% 50% 46% 40% 30% 20% 10% 0% NGOs Business Government MediaA7-A10. I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institution to do what is right. On a 9-point scalewhere one means that you ―DO NOT TRUST THEM AT ALL‖ and nine means that you ―TRUST THEM A GREAT DEAL, how much do you trust [INSERT] todo what is right? (Top 4 Box) Informed Publics ages 25-64 in 23 Countries, Asia Pacific and S. Korea. 4

South Korea has highest levels of Trust in NGOs Trust in NGOs Informed Publics ages 35-64 US UK/FR/GER S Korea China 80% 75% 70% 65% 63% 60% 55% 55% 53% 53% 50% 48% 45% 40% 36% 39% 35% 31% 30% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011A10. [Non-governmental organizations TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST thatinstitution to do what is right. On a 9-point scale where one means that you ―DO NOT TRUST THEM AT ALL‖ and nine means that you ―TRUST THEMA GREAT DEAL, how much do you trust [INSERT] to do what is right? (Top 4 Box) Informed Publics ages 35-64 in US, UK/FR/GER, S Korea and China 5

South Korea only APAC country where business is not trusted by a majority Trust in Business (2010 – 2011) 2010 2011 100% +16 Trusters Neutral Distrusters 90% 80% 80% +2 -8 70% 70% 67% 67% 64% 63% 62% 61% 61% 58% 57% 53% 60% 54% 56% 54% 54% 50% 46% 47% 45% 46% 40% 30% 20% 10% 0% Global APAC US Indonesia India Singapore China Australia Japan South KoreaA9. [Business in general TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institution to do what isright. On a 9-point scale where one means that you ―DO NOT TRUST THEM AT ALL‖ and nine means that you ―TRUST THEM A GREAT DEAL, how much doyou trust [INSERT] to do what is right? (Top 4 Box, Trust) Informed Publics ages 25-64 (Global excludes Singapore, UAE and Argentina) 6

South Korea more trusting of NGOs than business, in contrast to most other APAC countries Trust in Business and NGOs 100% Business NGOs 90% 80% 80% 70% 70% 66% 67% 65% 64% 62% 61% 62% 61% 61% 63% 62% 58% 60% 55% 54% 53% 51% 50% 46% 46% 40% 30% 20% 10% 0% Global APAC US Indonesia India Singapore China Australia Japan South KoreaA7-10. [TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institution to do what is right. Ona 9-point scale where one means that you ―DO NOT TRUST THEM AT ALL‖ and nine means that you ―TRUST THEM A GREAT DEAL, how much doyou trust [INSERT] to do what is right? (Top 4 Box) Informed Publics ages 25-64 in 23 countries 7

Just over half in South Korea trust media; trust stable since 2010 Trust in Media (2010 – 2011) 2010 2011 Trusters +11 100% +17 Neutral Distrusters 90% 86% +7 80% 80% 75% +4 70% 63% 63% +12 61% 60% - 11 59% 58% 54% 53% 49% 49% 50% 48% 50% 45% 38% 36% 40% 32% 30% 30% 27% 20% 10% 0% Global APAC US Indonesia China Singapore South India Japan Australia KoreaA8. [Media in general TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institutionto do what is right. On a 9-point scale where one means that you ―DO NOT TRUST THEM AT ALL‖ and nine means that you ―TRUST THEM A GREATDEAL, how much do you trust [INSERT] to do what is right? (Top 4 Box) Informed Publics ages 25-64 (Global excludes Singapore, UAE and Argentina) 8

Half in South Korea trust government; trust unchanged from 2010 Trust in Government (2010 – 2011) 2010 2011 100% +14 Trusters Neutral Distrusters 88% 90% +5 84% 80% 74% 77% +5 -6 70% 64% 62% 62% +11 59% 60% 52% 52% 51% 50% 50% 50% 47% 46% 42% 43% 44% 40% 41% 40% 30% 20% 10% 0% Global APAC US China Singapore Indonesia Australia Japan South India KoreaA7. [Government in general TRACKING] I am going to read you a list of institutions. For each one, please tell me how much you TRUST that institutionto do what is right. On a 9-point scale where one means that you ―DO NOT TRUST THEM AT ALL‖ and nine means that you ―TRUST THEM A GREATDEAL, how much do you trust [INSERT] to do what is right? (Top 4 Box) Informed Publics ages 25-64 (Global excludes Singapore, UAE and Argentina) 9

Along with companies in BRIC, companies headquartered in South Korea are least trusted Most Trusted National Identity for Companies – Global 2010 2011 Trusted HQ Countries Distrusted HQ Countries 100% 90% +3 80% 75% 76% 76% 75% 76% 73% 71% 73% 69% 69% 69% 69% 68% 64% 65% 70% 61% 63% +3 +4 60% +5 +5 50% 50% 50% 44% 42% 40% 39% 39% 40% 36% 34% 35% 30% 30% 20% 10% N/A N/A 0%A13-29. [TRACKING] Now I would like to focus on global companies headquartered in specific countries. Please tell me how much you TRUST global companiesheadquartered in the following countries to do what is right. Use the same 9-point scale where one means that you ―DO NOT TRUST THEM AT ALL‖ and nine meansthat you ―TRUST THEM A GREAT DEAL‖. (Top 4 box) Informed Publics ages 25-64 in 20 countries (excludes Singapore, UAE and Argentina) 10

Emerging markets, Singapore and South Korea the only countries to trust companies headquartered in South Korea Trust in Companies Headquartered in S. Korea100% Trusted Distrusted90% 83% 80%80%70% 66% 62% 60% 59% 57%60% 55% 51%50% 46% 46% 41% 41% 41% 38% 37% 37% 36% 36%40% 34% 30% 28%30% 24% 22%20%10% 0% A13-29. (South Korea) Now I would like to focus on global companies headquartered in specific countries. Please tell me how much you TRUST global companies headquartered in the following countries to do what is right. Use the same 9-point scale where one means that you "DO NOT TRUST THEM AT ALL" and nine means that you "TRUST THEM A GREAT DEAL". (Top 4 Box, Trust) Informed publics ages 25-64 in 23 Countries 11

Technology most trusted industry globally and in South Korea; Energy one of top trusted industries in South Korea in contrast to global results Asia Trust in Industries Pacific Technology 81% 87% 83% #1 Automotive 69% 77% 73% #3 Telecommunications 68% 78% 71% #4 Food and beverage 66% 66% 56% Biotech 65% 67% 68% #5 Retail 65% 71% 58% Entertainment 63% 67% 58% Pharmaceuticals 63% 72% 64% Energy 62% 68% 74% #2 Consumer packaged goods 59% 59% 56% OTC personal health care products 57% 61% 53% Brewing and spirits 57% 54% 56% Media 54% 64% 58% Insurance 52% 65% 51% Banks 51% 75% 64% Financial services 50% 66% 64% Significant at 95% confidence levelA30-45. [TRACKING] Now I would like to focus on your trust in different industry sectors. Please tell me how much you TRUST businesses in each of thefollowing industries to do what is right. Again, please use a nine-point scale where one means that you ―DO NOT TRUST THEM AT ALL‖ and nine meansthat you ―TRUST THEM A GREAT DEAL.‖ (Top 4 Box) Informed publics ages 25-64 in in 23 countries, APAC and S. Korea. 12

Trust Index 2009 – 2011: South Korea’s trust composite score increases and it edges up in the Trust Index ranking 2009 2011 China 61 Brazil 80 Brazil 58 Indonesia 74 India 58 China 73 Indonesia 58 Singapore 67 Global 49 India 56 Japan 49 Global 55 Australia 47 S. Korea 53 S. Korea 45 Australia 51 UK 42 Japan 51 Germany 42 France 50 France 41 Germany 44 US 36 US 42 Singapore N/A UK 40Composite score is an average of a country’s trust in all four institutionsAges 25-64 (Global excludes Singapore, UAE and Argentina) 13

Business and Society Toward shared value

Seven out of 10 in South Korea agree with Milton Friedman’s assertion that ―the social responsibility of business is to increase its profits‖ Milton Friedman: “The social responsibility of business is to increase its profits” % who agree 100% 90% 84% 80% 72% 70% 70% 70% 64% 60% 60% 57% 57% 56% 55% 52% 50% 49% 48% 50% 44% 44% 43% 43% 39% 37% 40% 35% 33% 30% 30% 20% 10% 0%G124. Please tell me if you strongly agree, somewhat agree, neither agree nor disagree, somewhat disagree or strongly disagree with the following quotefrom Milton Friedman: ―The social responsibility of business is to increase its profits‖? (Net: Strongly agree + somewhat agree) Informed Publics ages 25-64in 23 countries 15

But nearly seven out of 10 also believe business must align with society’s interests in creating shareholder value Believe corporations need to create shareholder value in a way that aligns with society’s interests, even if that means sacrificing shareholder value 100% 91% 89% 89% 89% 90% 85% 85% 85% 82% 81% 81% 80% 79% 78% 78% 80% 74% 73% 72% 71% 71% 70% 67% 63% 62% 60% 55% 50% 40% 30% 20% 10% 0%G120. Which of the following two positions comes closest to your view? A corporation should focus only on creating shareholder value, even if the way inwhich they create shareholder value conflicts with societal interests OR corporations need to create shareholder value in a way that aligns with society’sinterests, even if that means sacrificing shareholder value. Informed Publics ages 25-64 in 23 countries 16

Less than a majority in South Korea agree government needs to step in to ensure business behaves responsibly Believe that government needs to regulate corporations’ activities to ensure that they are behaving in a responsible manner 100% 90% 82% 82% 80% 74% 73% 70% 69% 70% 67% 66% 63% 63% 62% 61% 61% 58% 57% 56% 60% 53% 53% 50% 49% 48% 50% 44% 42% 40% 30% 20% 10% 0%G123. And which of the following statements is closest to your view? I trust corporations to act on their own to behave in a responsible mannerOR I think government needs to regulate corporations’ activities to ensure that they are behaving in a responsible manner. Informed Publicsages 25-64 in 23 countries 17

Expectation for companies to consult multiple stakeholders Importance of Stakeholders to a CEO’s business decisions – S Korea 100% 90% 80% 74% 74% 70% 70% 67% 61% 60% 50% 40% 30% 20% 10% 0% Customers Employees Society Local Communities GovernmentE112-117. [TRACKING] Now I would like to read you a list of business stakeholders. When a CEO makes business decisions for his or her company,please tell me how important you believe the interests of each of the following stakeholders should be to that CEO’s business decisions using a scale of 1 to9 where 1 means that stakeholder’s interests should not be important at all to the CEO’s business decisions and 9 means that stakeholder’s interestsshould be extremely important to the CEO’s business decisions. Let’s start with [INSERT FIRST]. How important should [INSERT FIRST]’s interests be toCEO’s decisions? (Top 4 Box, Important) Informed Publics ages 25-64 in South Korea 18

High quality, trust, and frequent communication most important to corporate reputation in South Korea Reputation Factors Asia Pacific Offers high quality products or services 94% 93% 85% #1 Has transparent and honest business practices 92% 90% 77% Is a company I can trust 92% 89% 85% #1 Treats employees well 92% 91% 82% Prices its brands fairly and competitively 90% 91% 83% #2 Communicates frequently and honestly on the state of its business 89% 90% 85% #1 Is a good corporate citizen 88% 88% 77% Is an innovator of new products, services or ideas 87% 85% 82% Delivers consistent financial returns to investors 79% 84% 74% Has highly-regarded and widely admired top leadership 78% 73% 72% Significant at 95% confidence levelB72-81. [TRACKING] How important are each of the following factors to the overall reputation of the company? Please use a nine-point scale where one compared to globalmeans that factor is ―not at all important‖ and nine means it is ―extremely important‖ to overall reputation. The first one is [INSERT FIRST]. How importantis this factor to overall reputation on a 9-point scale where one means ―not at all important‖ and nine means ―extremely important‖? (Top 4 Box, Important)Informed Publics ages 25-64 in 23 countries, Asia Pacific and S. Korea 19

A CEO Renaissance

Spokesperson credibility increases for CEO, regular employee and ―person like yourself‖ Credible Spokespeople – S. Korea 2010 2011 100% 90% 81% 80% 76% +13 +22 74% 71% +14 70% 67% 68% 63% 63% 59% 59% 60% 50% 50% 50% 45% 42% 40% 37% 30% 20% 10% N/A 0% Technical An academic A financial or NGO CEO Regular Person like Government expert within or expert industry representative employee yourself official the company analystD104-111. [TRACKING] Now I’m going to read you a list of people. In general, when forming an opinion of a company, if you heard information abouta company from that person, how credible would the information be—extremely credible, very credible, somewhat credible, or not credible at all?(Top 2 Box, Credible: Very + Extremely Credible) Informed Publics ages 25-64 in S. Korea. 21

CEO credibility gaining in many APAC countries, including South Korea Credible Spokespeople – CEO APAC 100% +20 2010 2011 90% +7 78% +14 +13 80% +10 70% 67% 66% +11 63% 58% 58% 58% 60% 51% 53% 53% 50% 50% 50% 50% 49% 50% 45% 40% 38% 40% 34% 31% 30% 20% 10% 0% Global APAC US India Japan South Singapore China Indonesia Australia KoreaD104-111. [TRACKING] Now I’m going to read you a list of people. In general, when forming an opinion of a company, if you heard information abouta company from that person, how credible would the information be—extremely credible, very credible, somewhat credible, or not credible at all?(Top 2 Box, Credible: Very + Extremely Credible) Informed Publics ages 25-64 (Global excludes Singapore, UAE and Argentina) 22

Depending on the crises situation, various voices required Though CEO must lead the charge S. Korea Trusted spokesperson Preferred spokesperson Preferred spokesperson when the during a company crisis during a product recall local community has been damaged 60% 60% 60% 54% 50% 50% 50% 43% 40% 40% 40% 30% 27% 30% 27% 30% 24% 21% 20% 20% 15% 20% 11% 12% 9% 10% 10% 7% 6% 9% 9% 9% 5% 10% 6% 4% 0% 0% 0%D100. Now I am going to read you a list of people. When a company experiences a crisis, please tell me which one of the following people you trust the most to deliver honest information aboutthat crisis. Informed Publics ages 25-64 in S. Korea.D101. Keeping the same list of people in mind, when a company issues a product recall, which one person do you want to hear information from about that recall? Informed Publics ages 25-64in S. Korea.D102. Keeping the same list of people in mind, when a company’s actions have damaged the local community where it operates, which one person do you want to hear information from aboutthat damage? Informed Publics ages 25-64 in S. Korea 23

People go to online search engines first for news and information about a company Where Informed Publics go for company news and information – S. Korea First Source Second Source Online search engine 39% Online news sources 32% Are these the same types of sources you consult first for information Online news sources 26% Social media 17% about a business crisis? Print(newspapers/magazines) 16% Broadcast (radio/TV) 15% No, 16% Social media 9% Online search engine 13% Broadcast (radio/TV) 8% Print 11% Yes, (newspapers/magazines) 83% Company website 1% Friends and family 6% Friends and family 1% Company website 5% 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% (NETS) I139. There are a number of sources one could use to find general news or information about a company. When looking for general news or information about a company, which one type of information source would you generally consult first? I140. And after [INSERT I139 RESPONSE], which one type of information source would you generally consult second when looking for general news or information about a company? II141. Now, thinking about a business crisis, are [INSERT I139 AND I140 RESPONSE] the same types of sources you consult first for information about a business crisis? Informed Publics ages 25-64 in S. Korea 24

South Korea most trusting of newspapers, TV and radio as sources of information about a company Trusted Information Sources – Trust a Great Deal APAC Television or television news 41% 25% #2 Traditional Newspapers 40% 31% #1 Radio or radio news 28% 23% #3 Magazines or business magazines 23% 9% Online search engines 25% sources Multiple Online 17% News/RSS feeds 18% 20% Content-sharing sites, such as YouTube 10% 14% Social Media Social networking sites 10% 19% Blogs 8% 8% Microblogging sites, such as Twitter 7% 15% Corporate Corporate communications such as press releases 24% 21% Corporate/product advertising 11% 12% Significant at 95% confidence levelH125-136. Now I’m going to read you a list of places where you might get information about a company. For each, please tell me if you trust it – a great deal,somewhat, not too much, or not at all as a source of information about a company? (Trust A Great Deal) Informed Publics ages 25-64 in APAC and S. Korea. 25

Informed publics need information from multiple sources, multiple voices And need to hear it 3-5 times to believe it S. Korea Ten or more times Six to Nine times (6-9), (10+), 2% Once (1), 6% 5% Twice (2), 21% Four or Five times (4 - 5), 25% 3-5 times 66% Three times (3), 41%H137. Think about everything you see or hear every day about companies, whether it is positive or negative. How many times in general do you need to beexposed to something about a specific company to believe that the information is likely to be true? Please give me a number.Informed publics ages 25-64 in S. Korea. 26

The Benefits of Trust

Trust protects reputation S. Korea When a company is distrusted When a company is trusted 51% will believe negative information after hearing it 1-2 times 38% will believe positive information will believe positive after hearing it 1-2 times 18% information after 32% hearing it 1-2 times will believe negative information after hearing it 1-2 times-Think about a company that you do not trust. How many times would you need to be exposed to (C83. positive information; C84. negative information)about that company to believe the information is likely to be true? Please give me a number. Informed publics ages 25-64 in S. Korea.-Think about a company that you trust. How many times would you need to be exposed to (C85. negative information; C86. positive information) aboutthat company to believe the information is likely to be true? Please give me a number. Informed publics ages 25-64 in S. Korea. 28

Through personal action, trust has tangible benefits Actions Taken Over Past 12 Months – S. Korea Distrusted Companies _+ Trusted Companies 85% 89% Refused to buy products/services Chose to buy products/services 79% 83% Criticized them to a friend/colleague Recommended them to a friend/colleague 56% Paid more for products/services 60% 72% Shared negative opinions online Shared positive opinions online 44% 47% Sold shares Bought sharesF118. [TRACKING] Thinking back over the past 12 months, have you taken any of the following actions in relation to companies that you trust? Pleaseanswer yes or no to each action. (Percent ―Yes‖) Informed Publics ages 25-64 in S. Korea.F119. [TRACKING] Still thinking about the past 12 months, have you taken any of the following actions in relation to companies that you do not trust?Please answer yes or no to each action. (Percent ―Yes‖) Informed Publics ages 25-64 in S. Korea. 29

ConclusionsBusiness must collaborate with other institutionsTransparency and consultation increasing asreputation driversCurrent media landscape plus increasedskepticism requires multiple voices and channelsTrust is a protective agent 30

The Transformation of Trust Old Trust Framework New Trust Architecture Control InformationProtect the Brand Stand Alone WHAT Focus Solely on Profit Profit With Purpose 31

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2011 Edelman Trust Barometer: South Korea Insights

by Edelman Korea on Mar 07, 2011

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2011 Edelman Trust Barometer: South Korea Insights — Presentation Transcript