Deloitte’s new practice to check business credibility
NEW DELHI : Consulting firm Deloitte is set to introduce a practice to help businesses measure the extent of trust regulators, investors, customers and the public place in them to help them identify areas for improvement and raise their trustworthiness among stakeholders. The consulting firm is currently assessing the top 1,000 companies by size in India, including listed ones, based on about 90 parameters to figure out where they stand in terms of stakeholder trust.
The ranking will be privately shared with the companies. Deloitte expects there would be takers for the new service given that regulators, customers and investors attach a premium on trust, and businesses going for public offers could use their ranking to help investors decide.
A Deloitte study a few years ago covering companies in advanced markets such as the US, found that highly trusted companies enjoyed 15-40% higher market capitalizations compared to less trusted rivals, said Sriraman Parthasarathy, partner, enterprise trust, Deloitte India. The initiative is based on the premise that trusted companies are able to better navigate volatility, particularly during periods when geopolitical trust deficits impact international investments as well as trade.
“We have found that companies, which are highly trusted, have high customer loyalty and retention. Also, irrespective of high compensation to employees, attrition remains high in companies where employees perceive trust problems.
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