Brand loyalty has been threatened by economic health. Cairbre Sugrue asks, can companies survive failing trust?

It is a bad habit, but it is very easy to be smug about the tribulations the U.S. is facing at the moment, as it helps us “Old World” Europeans cope with our insecurities. They’re loud; they can’t sort out their budget; their companies don’t pay tax and Miley Cyrus seems to be their global music ambassador. Ignoring the fact that the UK is run by a coalition, the European economy can’t get out of first gear and One Direction appears to be the best the UK can offer the world.

Setting aside such lazy and dubious stereotyping, recent events have raised a more serious question about the relationship the US has with the rest of the world. Namely, could the Snowden revelations and the “shut down” have a damaging impact on America’s brand reputation? Ultimately, is it diminishing trust in U.S. brands?

Many U.S. companies and individuals are greatly admired and respected around the world. Are we now at a stage in which American businesses should feel uneasy about the impact political scandal has on their ability to do business in Europe?

The technology industry is very much in the eye of the storm. European Commission digital agenda commissioner, Neelie Kroes is making loud and aggressive noises about the need to redefine data privacy and intelligence relationships with the U.S.

Worryingly for the technology industry – particularly those amassers of online data – the news that some nations, such as Brazil, are seeking to pass legislation that dictates citizen data does not leave the country could have significant implications. This said, American technology companies did recently win a stay of execution concerning changes to European data privacy laws. So, despite the emotive and provocative act of spying on heads of state, reason has not entirely left the building.

I would argue this is not a debate affecting one nation. Trust is an issue affecting every business large and small, and business leaders must remain constantly vigilant particularly in today’s court of global opinion. The Confederation of British Industry had a debate at its conference centring on trust in business and its former director general, Richard Lambert, recently questioned in the Financial Times whether big business had lost sight of its purpose. With pressure to meet quarterly targets and appease shareholders there is a question mark over the behaviour of a number of industry sectors, not least the energy providers in the UK.

The same is true for U.S. companies. They need to remember their business’ purpose: which, crucially in today’s society, is not limited to making a profit. Organisations play an integral role in society, both in terms of employment and in the stability they provide to communities. Company executives should be braver when it comes to talking about themselves and their company’s philosophy. Each organisation, particularly those that have been around for a long time, has an established personality. Stakeholders would be interested to understand what that personality is, its origins and the journey that company has taken over time.

The paranoid desire to control the message and hide behind corporate statements has broken big business’ connection with citizens. It has encouraged an atmosphere of secrecy, bred intensifying trust issues, and allowed detractors to create their own narratives about the motives of corporations. We should never forget that companies are run by real people with all their flaws and greatness – that’s what makes them exciting.

Cairbre Sugrue is general manager at Waggener Edstrom UK.