Trust and misinformation: governance outtakes

If you missed the Reuniting New Zealand session at the 2023 IoD Leadership Conference, we’ve captured some outtakes from it. These highlight some key themes and insights from the session and outline a few specific actions for directors and boards arising from it.

Key actions for directors and boards to consider are:

- Taking proactive action to build trust
- Putting disinformation on the risk register

Good communication has often been regarded as a mitigating factor on risk registers, but communication itself has changed with the proliferation of misinformation, mal-information, and disinformation.

Misinformation is broader than you might think. It ranges from false information shared without intent to harm; mal-information is used to express accurate information taken out of context with the intent to harm; and disinformation, is knowingly false information shared with the intent to harm.

In the draft National Security Long-term Insights Briefing, misinformation (including disinformation) was classified as the second highest short-term threat and the third-highest threat over the next 10 years, with natural disasters topping the list for short-term and long-term threats. Second on the list for long-term threats was hacking into information systems.

Misinformation is impacting on democracies across the globe, eroding trust in institutions. At the 2023 Institute of Directors Leadership Conference, Acumen Chief Executive and Managing Director Adelle Keely presented a breakdown of New Zealand data from the 2023 Acumen Edelman Trust Barometer. While New Zealand is still sitting in the neutral range[1] in terms of trust (measured across business, government, NGOs and media), we have slipped. And for the first time in 20 years, no Western-style democracies were within the trusting range.

While business is still our most trusted institution, and is considered competent and ethical (the only institution regarded as both of these elements in New Zealand), it has slipped into the neutral range on 58% against a global average of 62%. Our trust in government aligns with the global average on 51% (albeit dropping from 57%), whereas our trust in non-government organisations is slightly lower on 55% (vs 59% globally), and we have distrust in the media on 41% versus 50% (neutral) globally.

Despite business being the most trusted institution in New Zealand, “owned media” that the company produces itself such as annual reports, company newsletters and websites, was distrusted on only 31% (vs 47% globally), with traditional media being our most trusted source of information on 56%. Of note, social media was the least trusted source on only 17% (vs 41% globally) and search engines have trended upwards and are now on 55%.

For directors, the upside is that “my employer remains the most trusted institution” on 78%, even among those who feel most polarised. However, CEOs are expected to speak up and speak out on key public issues such as treatment on employees, discrimination, climate change, immigration and the wealth gap.

Action for directors and boards

With this background, director and boards should consider:

1. Proactive action to build trust

Forsyth Barr Managing Director Neil Paviour-Smith CFInstD says that the worsening misinformation is corrosive and undermines our trust in political and civil systems and institutions as well as social cohesion. Trust is fundamental to organisations so boards need to be concerned and take proactive efforts to bring about change by advocating for the truth, promoting civil discourse and holding false information sources to account.

Some of the trust in business comes from actions taken to speak up on workplace bullying, speak up on modern slavery, invest in health and safety, and invest in green technology (which connects for some organisations to their purpose and values). All of these are actions that help build trust and reputation.

A recent study by the Trust Leadership Institute found four key measures that consumers considered important to help establish trust:

• Data protection and cybersecurity
• Treating employees well
• Ethical business practices
• Admitting mistakes quickly and honestly

Other areas of importance were reporting on ESG actions, responsible deployment of AI and management of value chains – which, along with admitting mistakes quickly and honestly – fall under the theme of accountability.

2. Put misinformation on the risk register

The way we access and consume information has radically changed in the last few decades and the ease and speed of access to digitised information has come with numerous benefits but has also supported the rapid proliferation of misinformation. And with generative AI it is easier again to produce and disseminate credible misinformation.

Misinformation does not discriminate by organisation, industry or sector. As a known risk to organisations, misinformation therefore needs to be dealt with like any other risk, by assessing it as part of your risk register and determining what controls need to be put in place. While misinformation has common features with cyber-attacks and PR crises, it can blend in and be much more insidious.

Director and boards should consider:

• What parts of my organisation are most at risk from misinformation?
• What parts of my organisation would be most impacted by misinformation?
• How can we make our organisation less vulnerable to misinformation?
• What areas within my organisation could be targeted?
• How could we resolve a major attack?
• What would be the likely impacts on finances and brand?
• How do we protect our staff from buying into misinformation/conspiracy theories? 

[1] The Edelman Trust Barometer has three levels: Distrust 1 – 49%; Neutral 50 – 59%; and Trust 60 – 100%.