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Lack of trust in CEOs 'a major challenge for struggling firms'
HR News |
01/09/2010
Business managers and human resources departments face a tough task rebuilding trust with the general workforce following the recession, based upon new findings from the Institute of Leadership & Management (ILM).
A new report shows that the level of faith held by employees in their chief executive officer (CEO) has dropped considerably as a result of decisions taken during the downturn.
According to the ILM, many staff members blame their organisation's troubles on poor decision making at board level during the downturn.
Some 5,000 employees were surveyed for the second annual Index of Leadership Trust, with approval levels seeing a sharp drop within companies where redundancies have been made.
However, in organisations where alternatives to job losses were sought, such as flexible working and budget cuts, levels of trust in the CEO actually increased.
Female bosses appear to have emerged particularly well from the recession, the report states. Trust in female CEOs has increased by four points since the 2009 Index, with women achieving an index score of 66 on a 100-point scale, compared to 63 for their male counterparts.
The ILM found that male employees trust female CEOs more than they do male leaders, with the former seen as being more empathetic to members of the workforce.
Penny de Valk, chief executive of ILM, said it is clear that the actions of senior managers are scrutinised to a far greater extent during times of crisis.
"Major cuts are often seen as the direct result of poor management, even when this might be beyond their control," she stated.
"As CEOs strive to implement radical transformation, there is little prospect of success unless they bring their workforce with them. Employees have to trust their managers, at every level of the organisation."
Ms de Valk suggested that in the months and years ahead, CEOs will have to focus on building leadership competency and capacity, and communicating more effectively with staff.
Although the economy has seen three successive quarters of economic growth, starting in the final three months of 2009, some commentators still fear a double-dip recession.
For business leaders attempting to prove employee sentiment following the last downturn, such an occurrence would come as a major blow.
Posted by Stephen Wilkinson
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