2016 Edelman Trust Barometer Trust and the Family Business

Online Survey in 28 Countries Methodology General Online Population 5 years in 25+ markets Ages 18+ 1,150 respondents per country Informed Public Online Survey in 28 Countries 8 years in 20+ markets Represents 15% of total global population 500 respondents in U.S. and China; 200 in all other countries Must meet 4 criteria: Ages 25-64 College educated In top 25% of household income per age group in each country Report significant media consumption and engagement in business news 16 years of data 33,000+ respondents total All fieldwork was conducted between October 13th and November 16th, 2015 Mass Population All population not including Informed Public Represents 85% of total global population 28-country global data margin of error: General Population +/-0.6% (N=32,200), Informed Public +/- 1.2% (N=6,200), Mass Population +/- 0.6% (26,000). Country-specific data margin of error: General Population +/- 2.9 ( N=1,150), Informed Public +/- 6.9% (N = min 200, varies by country), China and U.S. +/- 4.4% (N=500), Mass Population +/- 3.0 to 3.6 (N =min 740, varies by country), half sample Global General Online Population +/- 0.8 (N=16,100).

Trust in Retrospect 2016 Growing Inequality of Trust 2001 2002 2003 2004 2005 2006 2007 2008 Rising Influence of NGOs Fall of the Celebrity CEO Earned Media More Credible Than Advertising U.S. Companies in Europe Suffer Trust Discount Trust Shifts from “Authorities” to Peers “A Person Like Me” Emerges as Credible Spokesperson Business More Trusted Than Government and Media Young Influencers Have More Trust in Business 2009 2010 2011 2012 2013 2014 2015 2016 Business Must Partner with Government to Regain Trust Trust is Now an Essential Line of Business Rise of Authority Figures Fall of Government Crisis of Leadership Business to Lead the Debate for Change Trust is Essential to Innovation Growing Inequality of Trust

The Impact of Trust on Business General Population Percent who engage in each behavior based on trust Behaviors for Distrusted Companies Behaviors for Trusted Companies Refused to buy products/services Chose to buy products/services Criticized companies Recommended them to a friend/colleague Shared negative opinions Shared positive opinions online most trusted content creators: #1 Friends and Family Disagreed with others Defended company most trusted media source: #1 Online Search Engines Paid more than wanted Paid more Sold shares Bought shares Source: 2016 Edelman Trust Barometer Q371-589. Thinking back over the past 12 months, have you taken any of the following actions in relation to companies that you trust? Please answer yes or no to each action. General Population, 28-country global total, questions asked of half the sample. Q377-380. 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. General Population, 28-country global total, question asked of half the sample.

State of Trust for Family Business

Business Trust At Post-Recession Highs Percent trust in business, 2012 vs. 2016 Informed Public Business General Population Source: 2016 Edelman Trust Barometer Q11-14. Below is a list of institutions. For each one, please indicate how much you trust that institution to do what is right using a nine-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 Public and General Population, 25-country global total.

Family Business Most Trusted, Lags in Asia General Population Public companies Percent who trust different types of business Family-owned State-owned Big businesses Privately-held Source: 2016 Edelman Trust Barometer Q15-17C. Thinking about different types of businesses, please indicate how much you trust each type of business to do what is right using a nine-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) General Population, 28-country global total and regions.

Trust in Family Business Rising General Population Percent trust in family-owned companies, General Population, 2015 vs. 2016 2015 2016 Increased trust in 19 countries 50% +8 +6 +10 +9 -5 n/a Source: 2016 Edelman Trust Barometer Q15-17C. Thinking about different types of businesses, please indicate how much you trust each type of business to do what is right using a nine-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) General Population, 27-country global total. GDP 5 = U.S., China, Japan, Germany, U.K.

Family Business Trusted Across All Demographics General Population Percent trust in family owned-businesses, General Population Gender Age Male Female Generation Z (18-20) Generation Y (21-34) Generation X (35-54) Boomers (55+) Source: 2016 Edelman Trust Barometer Q15-17C. Thinking about different types of businesses, please indicate how much you trust each type of business to do what is right using a nine-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; Bottom 4 Box, Do not Trust) S1: What is your current age? (Please select one response.) S6: Are you male or female? (Please select one response.) General Population, 28-country global total.

The Risk: Concerns About Business Leadership General Population Percent who agree with each statement about CEOs Overpaid Unrelatable Misplaced Focus 54% Not fairly paid relative to everyone else 50% Cannot relate to people like me 67% Too focused on short-term Source: 2016 Edelman Trust Barometer Q451-461 Thinking about CEOs, how strongly do you agree or disagree with the following statements? [‘CEOs are fairly paid relative to rest of workforce,’ ‘CEOs can relate to people like me,’ (Bottom 5 Box, Do Not Agree), ‘CEOs are too focused on short-term financial results (Top 4 Box, Agree), General Population, 28-country global total.

A Growing Trust Inequality… Percent trust in the four institutions of government, business, media and NGOs, 2012 to 2016 Informed Public Mass Population 12pt Gap 9pt Gap 3-point increase In trust inequality –which jumps to a 5-point increase among the GDP5 Source: 2016 Edelman Trust Barometer Q11-14. Below is a list of institutions. For each one, please indicate how much you trust that institution to do what is right using a nine-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 Public and Mass Population, 25-country global total. GDP 5 = U.S., China, Japan, Germany, U.K.

Trust Inequality Does Not Apply to Family Business Percent trust in family business, 2012 to 2016 Informed Public Mass Population Source: 2016 Edelman Trust Barometer Q11-14. Below is a list of institutions. For each one, please indicate how much you trust that institution to do what is right using a nine-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 Public and Mass Population, 25-country global total. GDP 5 = U.S., China, Japan, Germany, U.K.

“The traditional playbook of low-key, let-the-results-speak-for-themselves behavior will not work in an increasingly skeptical society upset by imbalanced economic returns.” -- Richard Edelman

The Opportunity for Family Business

The Opportunity: Lead to Solve Problems General Population 80% agree Up from 74% in 2015 “A company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates.” Source: 2016 Edelman Trust Barometer Q249. Please indicate how much you agree or disagree with the following statement? (Top 4 Box, Agree). General Population, 27-country global total, question asked of half the sample. .

The Opportunity: Leverage Purpose to Drive Trust General Population Percent who cite each as a reason for why their trust in business has increased or decreased Reasons Trust in Business Has Increased Reasons Trust in Business Has Decreased 59% Produces economic growth 50% Fails to contribute to the greater good 45% Contributes to the greater good 39% Lacks economic growth 40% Allows me to be a productive member of society 36% No public services Source: 2016 Edelman Trust Barometer Q328-329. For which of the following reasons, if any, has your trust in each institution listed below increased over the past year? Q330-331. For which of the following reasons, if any, has your trust in each institution listed below decreased over the past year? General Population, 28-country global total.

The Opportunity: Drive Job Creation and Long-Term Impact General Population The Opportunity: Drive Job Creation and Long-Term Impact Respondents who agree with each statement about CEOs CEOs Do Not Deliver Enough: 57% Positive long-term impact 49% Job creation But when we asked people to tell us their views on business leaders today, they are not necessarily seeing the actions they want to see. They believe that CEOs are too focused on short-term results, not enough on driving long-term impact. Too much lobbying; not enough job creation. Source: 2016 Edelman Trust Barometer Q451-461. Thinking about CEOs, how strongly do you agree or disagree with the following statements? General Population. [‘CEOs do too much lobbying,’ ‘Given that the average tenure of CEOs is just four years, CEOs aren’t in their role long enough to make a positive impact,’ ‘CEOs are too focused on short-term financial results’ (Top 4 Box, Agree), ‘CEOs can be trusted to create jobs’ (Bottom 5 Box, Do Not Agree)], 28 country global total.

The Opportunity: Embrace the License to Lead General Population Percent who agree that CEOs should be personally visible in discussing… 8 in10 Societal Issues 7 in10 Financial Results Income inequality Public policy discussions Personal views on societal issues Source: 2016 Edelman Trust Barometer Q496-506. How visible do you think a CEO should personally be in these different types of business situations? Please use a 9-point scale where one means that it is “not visible at all” and nine means that it is “extremely visible”. (Top 4 Box, Visible) General Population, 28-country global total, question asked of half the sample.

High Expectations For CEO Engagement Across Stakeholders and Channels General Population High Expectations For CEO Engagement Across Stakeholders and Channels Percent who agree that each of the following activities is important in building trust in a CEO Employees Your most important audience Source: 2016 Edelman Trust Barometer Q507-514 Thinking about how a CEO communicates with a variety of groups and individuals, how important are each of the following activities a CEO could engage in? Please use a 9-point scale where one means that attribute is “not at all important to building your trust” and nine means it is “extremely important to building your trust”. (Top 4 Box, Importance) General Population, 28-country global total, question asked of half the sample.

Leverage Diverse Voices General Population 2015 2016 Percent who trust information created by each author on social networking sites, content sharing sites and online-only information sources, 2015 vs. 2016 50% +9 +9 +10 Source: 2016 Edelman Trust Barometer Q598-609. Thinking about the information you consume, how much do you trust the information from each of the following authors or content creators? (Top 4 Box, Trust) General Population, 27-country global total, question asked of half the sample. * Asked as “Brands I don’t use” in 2015.

Communicate Across Traditional and Digital Channels General Population Percent trust in each source for general news and information Industry 2012 2013 2014 2015 2016 Search engines* 61 58 62 63 Traditional media 59 57 Online-only media** 46 44 47 45 53 Owned media 41 40 43 Social media Millennials Gap 66 3 58 5 51 7 Millennials Even more trusting of digital media than general population Source: 2016 Edelman Trust Barometer Q178-182. When looking for general news and information, how much would you trust each type of source for general news and information? Please use a nine-point scale where one means that you “do not trust it at all” and nine means that you “trust it a great deal.” (Top 4 Box, Trust) General Population and Millennials, 25-country global total. *From 2012-2015, “Online Search Engines” were included as a media type. In 2016, this was changed to “Search Engines.” **From 2012-2015, “Hybrid Media” was included as a media type. In 2016, this was changed to “Online-Only media.”

The Family Business Plan of Action Trust Actions Values Employee Advocacy Engagement To maintain and leverage the Family Business Trust Advantage, family businesses must understand and activate around a New Paradigm for Family Business Trust Actions Remain committed to sustainable business growth and leadership; explain how strategy is informed by family heritage Be vocal on long-term business strategy/impact, as well as key societal issues Develop meaningful philanthropic programming and communicate efforts and impact Understand and protect against reputational and business vulnerabilities Showcase the experience and contributions of next- generation leaders within the family company and prepare them for leadership Initiate employee engagement programs to ensure employees understand the connection to and value in working for a family business Create strategic opportunities to leverage next generation leaders and employee voices around key company perspectives and efforts Employee Advocacy Values Create a differentiating narrative that highlights the heritage and principles of the family to express the inherent value and impact of the family and business Leverage narrative to discreetly tell stories of business value and investments to key stakeholders across channels Engagement Lead from the front and explain to stakeholders not just what you do but how you do it and why Illustrate how the family business thinks and acts for generations, not quarters Drive visibility for the CEO and next generation leaders in the industry, around key social issues and in the communities in which they operate through speaking opportunities, partnerships, storytelling and initiative development

Thank You