Abstract
This study challenges the validity of a role for public relations (PR) as ‘trust strategist’ in global financial markets, by reframing trust, power and PR. The reframing takes place in three stages: First, by shifting the trajectory of PR research to focus on Giddens’s system trust theory, which, until now, has received little prominence in PR scholarship. Second, by drawing on Foucauldian perspectives to link system trust relations and power relations through discourse; revealing the strategies and practices used to produce trust in global discourses. Third, by locating PR activity within discursive moments of trust/mistrust production, repositioning PR as a ‘trust intermediary’ in global discourses.
Trust – a pressing agenda for PR
Trust has been portrayed as a crisis in modern times. After a series of organizational and systemic failures culminating in the Global Financial Crisis (GFC), the issue of public trust has never seemed more urgent or consequential (Arthur W. Page Society, 2009). Recent history has shown that the financial system is prone to ‘booms and busts’ of trust, which have increased public demand for transparency and accountability, and given rise to a lucrative growth industry in trust restoration (Hilton, 2004). Statements about trust are now regularly deployed by experts who position themselves as ‘trust strategists’ – public relations (PR) professionals among them. Trust restoration has become a recurring theme at PR industry conferences (CICOM, 2012; IPR, 2010; IPRA, 2012). However, PR’s desire for domain over trust has never been formalized. Trust is too nebulous a concept – it is not a managerial discipline, it is neither examined nor licensed, nor regularly discussed in boardrooms (Golin, 2004).
The purpose of this article is to reframe trust, power and PR in global discourses by exploring ‘booms and busts’ of trust in financial markets where trust is particularly crucial to business operations. The article is set against the background of concerted efforts to position PR as ‘trust strategist’ in global systems, an effort that can be directly traced to global PR firms and professional associations as they expand their worldwide presence. The reframing takes place through a set of processes: First, by shifting the trajectory of PR research to focus on system trust. Second, by establishing the link between trust and power relations, revealing the strategies and practices used to produce trust in global discourses. The third part of the reframing involves locating PR activity within discursive moments of trust/mistrust production, repositioning PR as a ‘trust intermediary’ in global discourses. This positioning draws on Giddens’s (1990) understanding of system trust, and uses Foucauldian (Faubion, 2002[1994]; Foucault, 1981) approaches to locate PR within a circuit of discursive relations linking trust and power.
Trust plays a part in the positioning of PR practice, with PR itself even defined as trust-building – equated at various points with ‘advertising for trust’ (Bentele and Wehmeier, 2003: 203) or ‘strategies for generating trust’ (ADECEC.com, 2012). Trustworthiness is understood to be the ultimate condition of public approval that PR seeks for companies, clients and the profession (Nielsen, 2006; Valin, 2004: 15). Golin/Harris, the global PR firm, has used the strapline ‘Building Trust Worldwide’, and was the first to the describe PR practitioners as ‘trust strategists’ (Golin, 2004: 2). Edelman, another global PR firm, launches its Trust Barometer each year at the World Economic Forum, the de facto ‘annual general meeting and health check’ for globalization (Edelman, 2008). The very site and scope of this launch underscores Edelman’s intent to forge its credentials as a trust strategist in the minds of global power elites who purchase PR services.
The ‘trust strategist’ role may be desirable when building PR’s influence in corporate boardrooms, but it presents a curious paradox for PR theory and practice. On the one hand, PR practitioners have been keen to promote their expertise in restoring trust following corporate failures. On the other hand, the PR field has been largely silent on how it may have contributed to a loss of public trust in the first place. Content to gloss over any potential misdemeanors, the field has instead profited from advising organizations on how to fix and/or manage poor levels of trust (Seaman, 2010), by moving forward and ‘setting things to rights’ (Nicholas, 2005; PRSA, 2003). For the PR profession, this glaring oversight is the ‘elephant in the room’ (Callaghan, 2003).
Meanwhile, researchers have explored links between PR and trust, including Bentele’s public trust theory (now receiving wider publication, e.g. Bentele and Seidenglanz, 2008). However, since the collapse of Enron in 2000, PR researchers have primarily focused on measuring and categorizing trust (Delahaye Paine et al., 2003). This narrow focus has meant that PR research has failed to get to grips with mistrust (Welch, 2006), or to explore possible links between trust and power. Indeed, the possibility that trust production may be part of organizational power-play contradicts normative views of PR in which the trust strategist positioning is expressed not as a desire for power, but as an ethical and professional responsibility (Bowling and Truitt, 2003). Critical voices such as L’Etang (2005) have challenged views of PR as a trustworthy pursuit. Moloney (2005) contends that trust and PR are strange bedfellows, distanced both by practitioners’ agency role and by the competitiveness of organizations and groups employing PR services. Lawniczak (2007) questions whether PR itself has contributed to repeated corporate scandals. Pitcher (2008) goes further, accusing PR practitioners in financial markets of complicity in selling ‘perceived value as a fundamental value’, becoming ‘hubristic architects’ of a message that was ‘only ever about boom – and to hell with bust’ (2008: 69).
Through this study, I want to acknowledge the ‘elephant in the room’ – to disrupt beliefs about PR professionals as ‘trust strategists’ – by problematizing the generalized trust placed in global financial systems. I maintain that if PR is to adopt the ‘trust strategist’ mantle, it should begin by identifying those individuals/groups whose practices led to a loss of public trust, and an understanding of how such practices are enacted, before focusing on ways of restoring trust. I argue here that public trust in financial systems is deliberately produced, and therefore a mechanism for power created through discursive and material practices. I contend that in the case of financial systems, PR works to produce trust by discursively translating financial discourses into trust discourses, in order to gain public consent for material financial practices. I draw from various post-structural perspectives to consider how one might empirically observe trust and mistrust in global financial discourses (see Table 1). By uncovering deliberate strategies used to produce trust communicatively, my purpose is to reframe trust, power and public relations.
The study explores two breaches of trust in the life insurance sector that took place in the 1990s, a decade before the GFC. The events involved two centuries-old mutual life insurers – Equitable Life Assurance Society and Mutual Life of Jamaica – similar companies pressured by the same market forces, yet located in different parts of the global financial system. Equitable Life operated in the UK, home to one of the world’s largest financial centres, where no fewer than 91 life insurers were created between 1981 and 2002 (Froggatt and Iqbal, 2002). At the time that Equitable Life collapsed in 2000, there were as many as 150 UK life companies (Froggatt and Iqbal, 2002), promoting hundreds of different life insurance products to a population of nearly 60 million people. Mutual Life of Jamaica operated in a much smaller financial centre at the periphery of the global financial system. While PR practices were visible in both systems, in complete contrast with the UK, Jamaica had fewer than a dozen life insurers (Foga, 2001), and a slimmer product range serving the population of less than 3 million.
The study contributes to poststructural perspectives of PR by exploring how PR privileges the trust (and mistrust) discourses deployed by expert fields in global financial systems (Holtzhausen, 2002; Motion and Weaver, 2005). The term ‘discourse’ refers here to systems of knowledge that inform the techniques and practices that constitute power in society (Wetherell et al., 2001). PR is defined here as one such system of knowledge, and therefore a societal activity rather than merely an organizational one. I also provide a conceptual framework opening up strategies and practices used to produce trust/mistrust in global systems, adding to the body of work contextualizing PR as discourse technology. I further address two imbalances in PR literature: By examining a cross-national data set located in global financial markets, I not only address the need for more cross-cultural PR studies, but also the need for more studies on PR activity in financial services, given the sector’s controversial role in contemporary systems.
This article is organized as follows: First, I examine the nature of the trust strategist paradox, which provides the context for this study. Next, I highlight the need for PR to place greater emphasis on system trust, by underscoring the limits of existing trust-related research in the PR field and unpacking the work of system trust theorists. Adopting a poststructural approach, I then position system trust production as a field of expertise and as a discourse in the Foucauldian sense of the term. Thereafter, I present details of the two data sets – Equitable Life and Mutual Life – and the events which led to their collapse, before setting out the method and materials, together with findings and analysis.
Trust, power and globalization
While trust and PR have been closely linked as research concepts (Rawlins, 2008; Watson, 2005), PR research has primarily framed studies about trust in terms of PR professionalism or from an organizational perspective. In the first research direction, trust is framed as a question of professional conduct within the PR profession focused, for example, on credibility and truth-telling by those operating in traditional and new media (Bentele and Seidenglanz, 2008). The second research direction is motivated by organizational legitimacy, survival and success, and focuses on how companies can gain trust communicatively in the first place, then profit by maintaining it (Harris and Wicks, 2010; Kramer, 2010). This research direction is concerned with exploring ways to measure and manage trust levels in organizations (Delahaye Paine et al., 2003), and ways for PR to restore public trust in organizations once lost (Poppo and Schepker, 2010). Such organizations are advised to ‘articulate a set of ethical principles’, ‘create a process for transparency’ and establish a formal means to measure organizational trust (Delahaye Paine et al., 2003: 2). Formal trust measurement isolates variables such as organizational competence, integrity, reliability, openness and honesty, shared goals and norms, the willingness to be vulnerable, and ‘control mutuality’ – agreement on the appropriate (im)balance of power between parties (Delahaye Paine et al., 2003).
I position PR as a societal phenomenon, in which trust production is a systemic rather than an organizational process; part of a series of global discourses. I conceptualize trust in financial systems as a form of system trust, perceived by Giddens (1990) as co-existing alongside interpersonal and organizational trust, and unable to emerge without them. In modern societies that need to manage complexity, system trust becomes an effective strategy for doing so. Since much of the knowledge and information circulating in globalized systems is specialist and difficult to trade, trust reduces the uncertainty of others’ actions (Korczynski, 2000). Giddens (1990) presents system trust as a faceless, impersonal form of trust placed in money and, increasingly, in expert systems of technical, educational, scientific or financial knowledge. These expert systems are ‘disembedding’ mechanisms, which lift social relations out of their local context and restructure them across indefinite spans of time–space. System trust emerges as a consequence of the loss of this local context, which previously acted as the site for trust production. When people put their trust in systems, they implicitly trust the experts who populate those systems. Consequently, this expert status, articulated in the form of specialist knowledge, becomes a source of power for the system and the actors within it. Financial services and PR are both knowledge systems that constitute power in modern society, but whereas many financial institutions deliberately promote their existence, the PR experts who represent them remain partially hidden from view.
Because system trust is a way of managing risk, the validity of claims to expert status is attributable in part to the degree to which experts’ specialist knowledge can be used to identify, calculate and manage risk (Gilbert, 2005). In this sense, trust, knowledge and power are inextricably linked. However, while system trust may be a way of managing risk, it is inherently uncertain. The possibility always exists that experts do not deliver on expected outcomes – a situation that would challenge their claims to expert status, the validity of their knowledge and the trust in the system as a whole. Consequently, any form of system trust co-exists with system mistrust, which Giddens defines as a degree of scepticism or an actively negative attitude to the system’s claims to expertise (Giddens, 1990). The use of PR techniques is particularly visible wherever experts proliferate; this is especially true of developed markets where more than 25 percent of workers are active in expert systems (Lash, 1994). In such markets, intense competition results in the perpetual contesting of expert claims by competing groups intent on proving untrustworthiness (Vassilev and Pilgrim, 2007) by questioning theoretical viewpoints, personal values, extent of knowledge and experience. Experts exploit rhetoric; using technical jargon to mystify one audience while debunking other experts’ jargon (Vassilev and Pilgrim, 2007) to impress audiences elsewhere. PR techniques are often used to promote one’s own expertise while simultaneously debunking that of competitors.
From a Foucauldian perspective, everything written or spoken about a specialist practice/knowledge controls those who lack specialist knowledge inasmuch as it excludes them from the ‘regime of truth’ defined by discursive rules of the field (Faubion, 2002[1994]; Foucault, 1981). This applies to the life insurance field, which is dominated by actuarial knowledge and expertise. The notion of trust in financial systems has been explored in detail by Lapavitsas (2007), who particularly focuses on how trust is produced in money, Giddens’s (1990) other principal disembedding mechanism. Money reduces complexity and manages expectations; our trust in it is based on the presumption that people we never meet will likewise honour its value. Anyone who trusts in the stability of the value of money and continuing opportunities for spending it also assumes that the financial system is functioning and places their trust in that function, not in people.
Lapavitsas contends that it is the state that regulates money and imbues it with trust, ultimately ‘lending’ trust to financial institutions (Lapavitsas, 2007). These financial institutions have differing influence over money and the trust that goes with it, becoming layered in a ‘pyramid of power’ (Kincaid, 2006). National central banks sit at the apex of the financial trust pyramid (Figure 1), providing guarantees to money and sustaining the trustworthiness of banks and financial companies at lower levels; ‘a socialisation of trust’ (Kincaid, 2006: 41), backed by state power. Banks are next on the financial trust pyramid, because they are situated at the pivotal point where concentrated flows of money pour into financial centres (Savage and Williams, 2008). Life insurers such as Equitable and Mutual Life are further down the financial trust pyramid, together with other long-term savings and investment institutions; followed by the brokers, advisers and consultants who act as intermediaries between laypeople and the rest of the financial system.
Trust Pyramid for Retail Financial Markets (adapted from Lapavitsas (2007))
All these institutions employ experts who possess specialized financial knowledge, which customers may find difficult or impossible to fathom. Financial institutions leverage this specialized financial knowledge by taking on risk on customers’ behalf (Rendtorff, 2008), packaging that risk into financial products and services. Consumers employ system trust when purchasing these products and services as their only way to reduce the uncertainty and complexity posed by the risk entailed. In this way consumers produce trust in the financial system, thus accepting the power of financial institutions and other authorities (Rendtorff, 2008). Actors at every level of the financial trust pyramid engage in PR activity; even at the pyramid’s apex, central banks and government departments use PR techniques to engage with stakeholders. All actors also have the potential to engage in purposive acts that produce both trust and mistrust, affecting the relative power that flows to and from actors in Lapavitsas’s (2007) pyramid.
In this article, I use these conceptualizations of system trust, power and knowledge to examine the ways in which communicative activity performed by UK and Jamaican financial actors prior to 2000 constituted a series of purposive acts that ‘carried’ (Fairclough, 2006) both trust and mistrust to specific places in financial systems. PR professionals were dominant actors in both life insurance industries, simultaneously producing trust on behalf of the experts they represented, while strategically placing mistrust in competing groups who threatened market position and/or profitability. In focusing on system trust, I do not downplay other forms of trust production: Sommer and Bentele (2006), for example, prioritize social and societal trust factors because expert trust factors cannot be easily judged by laypeople. I further acknowledge that global systems and global discourses are subject to local contextualities wherever they operate, and that cultural and local nuances apply. Trust evolves in different ways in different cultures, and, in the case of finance, is often closely linked with faith (De Goede, 2005). When system trust is finally produced it will operate at different levels in different systems and markets (Fukuyama, 1995; Tyler and Stanley, 2007). For instance, fewer expert groups proliferate and compete with each other in Jamaica’s smaller market, giving the state greater room on Jamaica’s financial trust pyramid. Cultural bias is also inherent in trust production, because of the media’s role in framing social representations of different countries through issues of trust (Marková and Gillespie, 2008). Public statements claiming that ‘country x’ is high (or low) in trust, for example, are stigmatizing, and PR contributes to such portrayals – illustrated by the Edelman Trust Barometer, which annually ranks trust levels in select countries. In this study, therefore, I do not rule out the possibility of societies where people place more trust in kinship networks or religious or national institutions than they do in expert systems (Boxill et al., 2007; Marková and Gillespie, 2008). I also acknowledge that, in addition to competing with their peers, expert groups periodically struggle with the state. I make space for local realities of exploitation and social struggles (Chandhoke, 2000), for historical rather than modern trust frameworks (Overton, 1999), and even a complete absence of trust relations between societal groups (Meeks, 2007). The next section provides background on the two data sets – Equitable Life and Mutual Life and the global financial discourses in which they are intertwined – before introducing the empirical analysis.
Life insurance in global financial discourses
In the early days of life insurance, policies were often a form of gambling on lives, wagers based on when specific individuals would live or die. By the late 1700s in the UK, the industry had successfully constructed a new trust identity by separating gambling from insurance practices, and establishing life insurance as a science and a discipline (O’Malley, 2002). During this period, life insurance discourses became global discourses, as UK actuarial expertise was used to underwrite lives in other territories, including Jamaica (a British colony from 1655 to 1962). By the Victorian era, life insurance had become a mark of respectability for the UK’s burgeoning middle class, and an important means of financial inclusion to newly freed Jamaicans after emancipation in 1834.
Although the colonial link between the two countries is now severed, Jamaica and the UK remain linked – part of a global network of financial centres created by the deregulation of western financial markets during the 1980s. The life insurance industry was expected to play a key role in the emergence of a widespread ‘investment culture’ (Langley, 2006: 921). Traditional life insurance products were sidelined as a means of pooling risks in the mass migration toward investment-linked policies known as unit trusts (mutual funds in North America). These new life insurance products became a ‘powerful ideological tool’ for ‘free-market orthodoxy’ (Harmes, 2001: 105), helping to embed mass investor practices into everyday lives, and converting many UK and Jamaican citizens into entrepreneurial investor subjects with the ‘initiative, energy, independence, boldness, self-reliance’, a willingness to take risks (Keat, 1991: 3). Finance became a ‘media event’ (Clark et al., 2004: 289), with life insurers becoming increasingly active in managing financial news, bolstering external PR activity and producing public trust as a means of influencing sales.
Equitable Life and Mutual Life
Although Equitable Life and Mutual Life operated in two different parts of the global financial system, they had several commonalities. Both were mutual societies, owned by customers who held membership status through policies that ‘participated’ in financial returns from a ‘with-profits’ fund. Historically, mutual societies filled a void in financial provision to those most vulnerable in society, thus engendering greater trust (McDonald, 1998; Simpson, 2001). So long as membership is reasonably homogenous, representing common interests, the mutual structure is a manageable one. However, once mutuals grow in size, acquiring non-participating as well as participating members, ownership and voting structure become unwieldy and problematic (Lewin, 2002). Mutual insurers also face a further conflict of interest between current and future generations of policyholders because one set of members stands to gain from underlying capital at the expense of others (Froggatt and Iqbal, 2002; Linton, 2002). Furthermore, in an era of proliferating neoliberal market forces, mutual insurers had become increasingly marginalized – forced to embark on aggressive marketing strategies in order to compete directly with the vast array of investment-linked products in deregulated markets, while simultaneously constrained by their mutual status from accessing equity markets to fund expansion growth.
Equitable Life was the world’s first mutual life insurer, established in 1762. Centuries later it continued to grow through sales of ‘with-profits’ policies, which paid an investment return to customers at regular intervals. The accepted industry practice for managing with-profits policies is to ‘smooth’ investment returns by keeping back some profit in good years, in order to provide better returns in bad years. Profits built up but not paid out are known as the ‘inherited estate’. Equitable was well-known for consistently paying out high annual returns, forging a basis for continued trust. However, problems arose with its annuity products (insurance policies designed to convert a pension into guaranteed, regular income payments). Customers sold Guaranteed Annuity Rate (GAR) products lost trust in Equitable Life once the insurer began lowering returns on these products, effectively reneging on its guarantees (O’Brien, 2006).
The year prior to Equitable Life’s collapse, events were unfolding with another mutual life insurer thousands of miles away. Mutual Life of Jamaica was one of the oldest, most successful companies in the Commonwealth Caribbean (Lindo, 1994). Yet its regional success was counterbalanced by nationalist burdens. Jamaica’s attempts to participate fully in the global economy put pressure on all domestic financial institutions to earn as much revenue as possible from foreign-currency denominated products. Mutual Life diversified its business model and expanded into foreign markets to meet this challenge (Lindo, 1994). Unlike Equitable, much of Mutual Life’s premium income came from modern investment-linked policies offering a projected return similar or higher than the return from retail banks (Foga, 2001). However, high operating expenses, premature encashment and policy surrender, combined with normal maturities of long-term savings instruments led to an increase in Mutual Life’s cash needs (Foga, 2001). The insurer over-extended itself through a massive loan from its own banking subsidiary. Mutual Life’s own auditors then produced mistrust in the insurer’s accounting for the loan on its balance sheet. The government later pronounced overall mistrust in Mutual Life’s managerial expertise by closing the company for good.
Both life insurers had actively engaged in PR up until the time of their collapse. Equitable’s promotional strategy can be summed up by its slogan, ‘No commission, no shareholders and low charges. You profit from our principles’ (Plender, 2000: 22). The insurer promoted its track record of superior returns heavily, and used PR to position itself as ‘a trusted adviser in a complex and rapidly changing marketplace’ (Equitable Life, 2000: 26). Equitable also emphasized its mutuality, equating this status with traits of openness and fairness. In the UK’s complex, heavily intermediated financial market, third-party endorsement was crucial. Equitable used trusted celebrity spokespeople in its promotions, enjoyed strong support from the financial media and regularly won personal finance awards, reproducing these plaudits in its customer literature and annual reports.
Mutual Life operated in a smaller market with fewer competing firms. Although Mutual Life promoted its mutual status, it did so to a lesser extent than Equitable because it had largely stopped selling participatory policies (Lindo, 1994). Instead, Mutual Life’s PR privileged discourses of ‘nation-building’, part of a grand narrative of support for Jamaica, ‘Jamaican-ness’ and the Jamaican people. Mutual Life promoted its financial support for education, sports, art, music and culture for the benefit of its ‘policyholders, clients and Jamaica’ (Mutual Life, 1992: 21). The insurer also promoted its direct investment in low-income housing, as well as its foreign exchange earnings from agro-exports and tourism (Mutual Life, 1991). In a small market, Mutual Life spent less time seeking third-party endorsement, focusing instead on building trust in company personalities – its founders, its directors and its sales team. Neither insurer was proactive in publicizing the substantial risks on its respective balance sheets – in Equitable’s case, its unfunded guarantees and in Mutual Life’s case, its unserviced internal bank loan.
Method and materials
Trust has been the subject of discursive methodologies in fields such as health, environmental sciences and the media, variously exploring trust production as a managerial discursive strategy (Grey and Garsten, 2001), a locally meaningful performative act (Carolan, 2006) or as self-legitimizing discourses (Biltereyst, 2004; Gilbert, 1998). I have set out to locate moments of trust/mistrust production adopting a Foucauldian discursive analytic technique to explore two historical events, problematizing trust production (and hence the need for trust strategists), by exploring how power and resistance causes systemic trust relations to shift over periods of time; what Foucault (1981: 70–71) refers to as ‘processual aspects of the web of discourse’. Foucault did not prescribe a specific methodology, and his views of discursivity evolved over time. However, I employ three important ideas from his work: First, Foucault’s emphasis on identifying and isolating practices, in this study, specifically practices which produce trust or mistrust. Second, Foucault’s recognition of the complex interaction of discursive and non-discursive practices (Prasad, 2009), so that trust is not only produced through discourse but through material acts. Third, Foucault’s acknowledgement of structural hierarchies within discourses (Risse, 2007), so that while trust discourses may be constantly in motion and flowing, structural layers of trust also exist as illustrated in Figure 1, together with trust roles and access points (Giddens, 1990). The most important structural roles are the ‘trust guardians’ (Shapiro, 1987) who oversee financial markets, from central banks and regulators at the apex of the financial trust pyramid (Figure1) to professional associations that self-regulate financial industry (Shapiro, 1987).
In order to seek out trust within discourses, I devised a knowledge apparatus by modifying Curtin and Gaither’s (2007) societal perspective of PR in discourses. Applying du Gay et al’s (1997) ‘circuit of culture’, Curtin and Gaither propose that PR professionals act as cultural intermediaries between producers and consumers in the circuit of culture, actively creating meanings by establishing an identification between products or issues and publics; and encoding organizational texts with the dominant identity they want to convey, around which they attempt to structure subsequent discourses. From the circuit of culture, I devised a ‘circuit of trust’ with which to seek out discursive moments of trust production, consumption, regulation and representation, all of which influence a financial actor’s trust identity (Curtin and Gaither, 2007). I theorized that, in a discursive circuit of trust, PR would be among those techniques used by financial institutions and other market actors to encode organizational texts with the trust identities they wished to convey, but that texts might also be used to encode mistrust in any market actor who posed a threat to market position or profitability.
Materials
The core data for my study were texts connected with events surrounding lost trust in Equitable Life and Mutual Life. Each data set consisted of five texts, selected for their mediated visibility, their demonstrable power in shifting trust discourses, or because they uncovered marginalized voices. My objective was to establish the extent of PR’s link with trust/mistrust production, so my approach was inclusive of all actors involved in trust/mistrust discourses. To this end, the Equitable data set consisted of a technical actuarial presentation, a report ranking annuity providers, a high court judgment, a consumer group’s press release and a letter to the editor from a lone consumer activist. The Mutual Life data set consisted of a Sunday newspaper advertorial, an auditors’ letter, a corporate advertisement, a parliamentary speech and a letter to the editor by a ‘captain of industry’. The texts were not all produced for PR purposes, though some may have hidden or collaborative authorship, while PR techniques were certainly used to deploy and/or redeploy most documents. I conducted a fine analysis of the texts seeking out discursive moments of trust/mistrust and associated practices, considering issues of power within identified trust relations, and determining the touch points for PR, if any. The approach combined interpretative techniques to discern important discursive moments, as well as comparative techniques focusing specifically on the discursive moments to discern ‘patterns of order’ (O’Farrell, 2005: 71) across the trust practices emerging in both data sets.
Data analysis
Equitable Life’s dilemma
The first text analysed for Equitable Life is entitled, ‘With-profits Without Mystery’, a technical presentation delivered to the Faculty of Actuaries, one of two main trust bodies
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that set standards for UK actuarial practices. The presentation is a performative act of trust as Equitable’s actuaries enlist support for the company’s business practices from their peers. The title of the presentation speaks to Equitable’s attempt to position itself as expert, and therefore trustworthy because of its clear, simple approach to an otherwise arcane business, expressed as follows: Within our office we had begun to feel a growing frustration with the fairly prevalent obfuscation within the industry regarding with-profits business compared with our tendency to view it in a simple straightforward way … developing a coherent philosophy of with-profits business in the modern environment … (Equitable Life, 1990: 139)
The locus of the presentation is Equitable’s perspective on the ‘inherited estate’ built up over generations in its with-profits fund. Equitable’s actuaries assert that they ‘do not believe in the concept of an estate’ as a ‘body of assets’ that ‘belongs to no one’ (Equitable Life, 1990: 142). The actuaries argue that the need to maintain this surplus is a myth, an unneccessary, unfair practice, and that the inherited estate rightfully belongs ‘to the current generations of with-profits policyholders’ (Equitable Life, 1990: 142). Ultimately, Equitable’s actuaries attempt to produce mistrust in the long-standing practice of maintaining a surplus. However, Equitable’s revisionist sentiments appear to be driven by pressure to keep current policyholders happy, while attracting new ones, through high annual returns. Previous attempts to cut bonus payments had brought Equitable’s actuaries into direct conflict with their marketing and PR colleagues (Equitable Life, 1990: 146). After a bonus cut in 1987, Equitable’s PR team had found it necessary to launch a publicity offensive, briefing the sales force and the press. The PR offensive succeeded in keeping ‘adverse comment’ to a minimum (Equitable Life, 1990: 148), enabling Equitable to keep its trust identity intact. However, Equitable’s real scrutiny was to come from another quarter in the shape of the Independent Financial Adviser (IFA) community, represented in the next text.
The market fights back
While many life insurers paid IFAs a commission to sell their products, Equitable focused on direct sales. Whether or not they had a relationship with Equitable, IFAs still had to field customer questions about Equitable’s products. By the late 1990s, customers were raising questions about Equitable’s GAR products because the expected rates were no longer guaranteed. In fact, rising interest rates had driven up the value of GARs, making the guarantees expensive for Equitable to honour (House of Lords, 2000), but refusing to honour the guarantees came at a cost: Equitable faced substantial PR and legal implications arising from unprecedented customer complaints and negative media coverage (Penrose, 2004). The next financial actor to enter the discursive event is the IFA annuity specialist Annuity Direct, a firm that primarily earned its revenue from fees, not commission. Expert in using PR techniques to generate sales leads, Annuity Direct regularly supplied annuity price comparisons and commentary to the media (Battersby, 2009).
According to Annuity Direct, it first started fielding complaints about Equitable’s GAR policies in 1997 (Lewis, 2001). Following repeated attempts to resolve issues with Equitable’s products, the firm published ‘The Good, the Bad & the Ugly’, a 1998 report rating insurers on how well they communicated the facts of their GARs (European Parliament, 2007). The report’s title bifurcates the life insurance sector into trustworthy (good) and untrustworthy (bad or ugly) annuity providers. Most of the life insurers featured were rated ‘bad’; but only Equitable Life was rated ‘ugly’ (European Parliament, 2007). The report, which was ‘leaked’ to the press (European Parliament, 2007), provided trust representation for Annuity Direct, by highlighting the firm’s expertise on a wider plane. The report is no longer available,
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but its discursive power is evident in the visibility it gleaned from the national media,
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which the report’s author described in a public inquiry: The moment it became public, people [said we] stirred it up. Well, I have never had to non-spin or non-stir a story … as much as the GAR story for Equitable. All we did was photocopy policy statements, policy documents and the original quotations from a range of clients … packaged them together as 14 pages and … sent them off to journalists … (European Parliament, 2007: 13–14)
The report’s discursive power was also apparent in the reaction it provoked from Equitable Life. While outwardly, the insurer dismissed the report’s findings as a nuisance and lacking in substance, internally Equitable hosted company-wide briefings to consider potential fallout (European Parliament, 2007). Meanwhile, the report allowed Annuity Direct to renegotiate its trust identity as a ‘champion’ for fairer annuities. By the time Equitable staged its next Annual General Meeting, Annuity Direct had formed the 2000-strong Equitable Life Action Group (ELAG), with enough membership subscriptions to start legal action against Equitable Life (European Parliament, 2007; 13–14).
High Court judgment
Equitable used its 1998 Annual General Meeting (AGM) to pre-empt ELAG by announcing its own court action (Weever, 2000). The insurer’s case contended that Article 65 of Equitable’s articles of association gave it powers to override guarantees offered on its GARs, allowing directors to pay a bonus as ‘they shall think fit’ (House of Lords, 2000: 3). The test case went first to the High Court, which ruled in Equitable’s favour. This ruling was subsequently overturned by the Court of Appeal. Equitable then turned to the House of Lords, the final court of appeal at the time. The third text represents the final ruling on Equitable Life Assurance Co v. Hyman (House of Lords, 2000), which sets out judicial opinion from four Law Lords. While these judges represent legal, rather than financial, expertise, they reside at the apex of Lapavitsas’s (2007) financial trust pyramid because they wield disciplinary power over the UK market. All four Law Lords who presided dismissed Equitable’s appeal, with one judgment ruling that ‘the directors were not entitled to adopt a principle of making the final bonuses of GAR policyholders dependent on how they exercised their rights under the policy’, and that by ‘adopting the principle of a differential policy in respect of GAR policyholders’, Equitable was ‘in breach’ of its own Article 65 (House of Lords, 2000: 7). For GAR customers, the ruling produced a moment of mistrust regulation deeming Equitable’s life insurance practices untrustworthy.
Compromise
The Law Lords’ mistrust regulation dictated the material transfer of £1.5 billion of Equitable’s with-profits fund from its 290,000 non-GAR policyholders to its 90,000 GAR policyholders (Headdon, 2001; Penrose, 2004). Equitable Life lacked adequate funds, so a compromise was desperately required. A survey commissioned revealed that more than half of Equitable’s policyholders were prepared to compromise in order to stabilize the with-profits fund (MORI, 2001). Under new management, Equitable hired Burson-Marsteller on a crisis communications brief to improve relations with policyholders, while retaining The Maitland Consultancy for day-to-day PR (Scott, 2001). A nationwide road show was launched to win back trust and build support for divesting the company and selling its assets. At this juncture, a new customer activist group – Equitable Life Members Action Group (EMAG) – took centre stage, focused on negotiating a compromise with Equitable. The group retained Bell Pottinger Public Affairs (Lepper, 2003) to lobby the government for compensation resulting from its poor regulation of Equitable Life. The penultimate text is an EMAG press release (EMAG, 2000), which highlights an idealized role for PR in steering discourse from conflict to compromise.
The release describes ‘constructive’ meetings with Equitable, achieving a ‘significantly improved appreciation of the process’ and the considered options for protecting the ‘long-term interests’ of policyholders (EMAG, 2000). The EMAG release advised that ‘clarification is being sought on a number of complex issues’, but in the meantime Equitable was being urged ‘to improve communication with members’ and ‘to consider any further alternatives to an outright sale’ (EMAG, 2000).
EMAG produces trust by simplifying the issues for policyholders going forward, and sharing information clearly and concisely, all techniques that are integral to normative PR practice, illustrating one certain way in which PR engages in trust production. However, other meanings are encoded in the press release. It also provides a moment of mistrust representation, raising concerns over potential ‘public confusion’ between EMAG and ‘the other action group’ (EMAG, 2000). Here, EMAG separates itself from the longer-standing Equitable Life Action Group (ELAG), questioning the latter’s confrontational and divisive approach, while asserting that EMAG ‘seeks the best long-term interests of all categories of members’ (EMAG, 2000).
Voices from the margins
Despite the new spirit of consensus, Equitable could neither find a buyer nor continue to operate, eventually closing to new business. The final text represents a lone activist – a retired academic and Equitable Life customer – who gives voice to the under-represented views of Equitable’s 290,000 non-GAR customers. The text is an open letter to the Press Complaints Commission (Stonebanks, 2001), copied to the media, and published on the author’s web page. Written months after Equitable’s collapse, the letter attempts to restore trust in Equitable Life by producing mistrust in Annuity Direct, in Equitable’s GAR customers and in the financial media. In the letter, this non-GAR customer concedes that while Equitable had ‘made mistakes’, its problems had been exacerbated by ‘unfair press reporting’ (Stonebanks, 2001). Investors ‘need confidence that the company that is managing their savings can be trusted’, asserts the author, ‘and Equitable Life could be trusted’ (Stonebanks, 2001). The activist blames Annuity Direct and Equitable’s GAR policyholders for taking ‘more than their share of the assets’ (Stonebanks, 2001) at the expense of non-GAR customers and the wider with-profits industry. His letter concludes the Equitable Life data set, but not the saga, which dragged on for more than a decade, marked by ongoing PR and lobbying activity as both the company and customer action groups pursued legal and political redress.
Mutual Life marks time
The case of Mutual Life is a different sort of demise, yet set against the same backdrop of increased competition in financial markets. Mutual Life’s collapse was one of several corporate failures in Jamaica’s domestic financial sector in the 1990s, yet its demise stood out because of the insurer’s trusted status built on a history dating back to 1844. The data set begins with Mutual Life’s 150th anniversary, set against the backdrop of a foreign exchange crisis. The Jamaican currency was not a tradable resource in global markets – too risky and volatile to act as a disembedding mechanism (Giddens, 1990) for system trust production. The only way for Jamaica to build supplies of tradable foreign currency was to borrow it, or earn it through exports and investment; the government placed pressure on the private sector to achieve the latter goal. Mutual Life’s 150th anniversary posed a significant PR opportunity for the insurer to reaffirm its trust identity within the context of such revised national goals. The first text is a sponsored 24-page Sunday press advertorial (Mutual Life, 1994), through which the reader is able to experience Mutual Life’s corporate existence as meaningful. PR techniques come into play through corporate myth-making – attaching ceremony and ritual to Mutual Life’s past and dramatizing its role in Jamaica’s history, which the company describes as follows: We can measure Mutual Life’s success by the way … it has not only survived, but triumphed through 150 years of momentous changes in Jamaican society … by the difference it has made in people’s lives [and] in the contribution it has made to [development] by investing in significant areas of the economy, and, equally, by investing in people … (Mutual Life, 1994)
The text presents Mutual Life as emancipator, nation-builder, visionary, and as a ‘beacon of inspiration’ and hope (Mutual Life, 1994: 2). The advertorial is also designed to instil pride among employees, communicate growth to external shareholders and align with government policy. Mutual Life supports national aspirations: promoting its role in helping Jamaicans to achieve home ownership and fund their children’s education; supporting social and economic development through investment in tourism, ‘sports, culture and activities which strengthen the community’; and finally emphasizing that it can be trusted to protect customer assets, bringing ‘financial security’ to ordinary Jamaicans (Mutual Life, 1994: 2).
Auditors contest the balance sheet
By the mid-1990s, rumours were emerging of mismanagement at Mutual Life. The insurer’s attention was divided between its core operations and diversified interests in real estate, tourism and agriculture. Ventures into real estate projects had resulted in substantial overruns, with a range of non-performing assets (Foreman, 1997). Equity-linked policies had faltered because of stock market declines. Bankers within the group were reportedly using customers’ money to borrow from the parent company at favourable rates, investing the money internally to make a sizeable spread (Ritch, 1996). Things came to a head in 1996 when Mutual Life’s auditors examined the balance sheet and uncovered an unserviced loan from Mutual Life’s own banking subsidiary, National Commercial Bank (NCB), a loan twice the size of NCB’s capital base (Persaud, 2006), as detailed in this excerpt: At 31 December 1995, the carrying value of the Society’s investment in its banking subsidiaries was approximately $2 Billion in excess of its market value … The banking subsidiaries have incurred losses of approximately $890,000,000 … $390,000,000 of which is attributable to the Society … Because of the significance of the matter … we are not in a position to, and we do not express, an opinion as to whether the accompanying financial statements give a true and fair view of the state of the affairs of [the] Society … (Price Waterhouse, 1996)
A company produces trust in its material ability to protect assets by discursively representing this ability on its balance sheet. Not only do life insurers have obligations to protect assets, they must maintain large capital reserves to cover potential liabilities. This capital reserve is a trust regulation measure stipulated by regulators, and acts as a guarantee to customers and to the rest of the financial system. Auditors play a further role in regulating this trust when they verify a company’s balance sheet (Gilbert, 2005). In an act of mistrust production, the auditors exercised discursive power over Mutual Life by refusing to sign off the 1995 accounts, noting ‘significant declines’ (Price Waterhouse, 1996) in the insurer’s fund account and disputing Mutual Life’s valuation of investments in its loss-making banking subsidiaries.
Mutual Life fights back
Mutual Life’s initial response was to delay publication of the accounts, change auditors and embark on a PR offensive, publicizing details of its request for a government bailout to tackle insolvency. The next text forms part of this PR offensive: Mutual Life’s board placed a corporate advertisement in the national press to mitigate the damage wrought by its failed audit. Completely avoiding the specific issues raised by the auditors, Mutual Life focuses on current efforts to restore trust. The company asserts its readiness be transparent in discussing its affairs, asserting its support for ‘the principle that Auditors are the policyholders’ watchdog’. Its ‘decision to change Auditors does not in any way violate this principle’, states the insurer. It was ‘not unusual’, even prudent, ‘for companies to change Auditors’ (Mutual Life, 1997: 10). The insurer contends that it complies with both trusted national and international accounting standards. Mutual Life positions its government bailout as a form of trust and confidence placed in its ability to turn itself around, clarifying steps taken in its restructuring including a 50 percent staff reduction and wage freeze. The insurer finally offers past performance as a guarantee that having ‘never failed our policyholders in the past’ it would not do so ‘now, or in the future’ (Mutual Life, 1997: 10).
Government ‘disciplines’ Mutual Life
Jamaica’s domestic financial crisis was in full sway. Since Mutual Life was only one of several financial institutions receiving bailouts, the industrial and commercial sectors expressed grave concerns with the government’s handling of the crisis (Persaud, 2006). In late 1997, the finance minister moved to establish trust in the government’s response to the crisis through a statement to parliament (Jamaica Parliament, 1997: 292–293). The statement, potentially prepared by communicators and special advisers, illustrates governmental PR techniques: aiming to produce trust by setting out a clear rationale, with simplified messages that are accessible to the taxpayer in the form of nine clear steps taken to restructure Mutual Life. Mutual Life is singled out for attention in the statement because of the sheer number of policyholders (360,000) and the size of its bailout (J$10 billion). The finance minister further underscores Mutual Life’s significance: Jamaica Mutual [is] important in that it is the largest shareholder in the NCB Group … the country’s largest commercial bank [which] covers approximately forty percent of total deposits in the banking system … hence … the problems faced by Jamaica Mutual stands in our list of priorities … (Jamaica Parliament, 1997: 292)
The minister signalled his intent to protect taxpayers’ funds as well as the assets of Mutual Life’s policyholders through ‘nine principles’ that would prove a moment of mistrust regulation for the life insurer, effectively stripping it of power: Mutual Life would have to ‘return to its core business’ and ‘disengage’ from NCB, with the government acquiring this vast shareholding (Jamaica Parliament, 1997: 292–293).
Voices from the margins
With the financial sector in crisis and the Jamaican economy reeling under the debt burden left by government bailouts, Jamaica’s industrial and commercial sector would be expected to pick up the pieces – to continue exporting, investing and producing ‘value’ by earning foreign currency. In the past, this sector had exerted considerable influence, but a protracted period of double-digit interest rates had forced many to close factories, as investors moved money into high-yielding financial instruments. The diversion of power from the ‘real economy’ to the financial sector rankled commercial and industrial interests; and financial sector bailouts rankled even more. The final text is a letter to the editor (Matalon, 1997) written by one of Jamaica’s ‘captains of industry’: he speaks for the traders, manufacturers, hoteliers, farmers and small business owners marginalized by punitive interest rates and preferential treatment accorded to financial institutions.
The businessman expresses shock that ‘our government’ intends ‘to pump $10 billion into Mutual Life’. He accuses Mutual Life of instilling a culture of ‘salaries, privileges and concessions far in excess of what any other company in Jamaica enjoys’ (Matalon, 1997: 8). He then engages in mistrust production in both Mutual Life and the Government, arguing that Mutual Life would receive its bailout at a favourable rate of 5 percent, yet the funds themselves would cost taxpayers ‘approximately 29%’ through the sale of Treasury Bills. The businessman demands a commission of inquiry into Mutual Life’s ‘shocking and unacceptable performance’, and into the government’s handling of the affair (and the wider domestic financial crisis). The letter was to no avail; global forces would continue to shift power inexorably away from Jamaican industry and commerce, and toward finance. Meanwhile, the Government sold Mutual Life’s assets to a Trinidadian life insurer (Jamaica Business, 2005). There would be echoes of déjà vu, as the company, re-christened ‘Guardian Life’, engaged in a PR campaign to rebuild trust, with messages that spoke of patriotism and nation building, in believing ‘in Jamaica and Jamaicans’ (Jamaica Business, 2005: 36).
Discussion
Empirical findings
Equitable Life and Mutual Life were both mutual societies with Victorian origins; this historical structure formed part of their trust identity. However, modern trust relations have been a game-changer for mutuals, particularly as deregulation and liberalization placed domestic financial sectors in new positions of national leadership and trust (Stone, 1994). The Equitable Life data set reflects the proliferating trust/mistrust discourses in UK life insurance with increasing numbers of experts competing for trust, including the UK’s large, formalized network of IFAs. Many of these expert fields have the resources to engage PR services for protracted campaigns; with its well-established press relationships, Annuity Direct represented one such expert field. Annuity Direct’s success in generating mistrust in Equitable Life is encapsulated in its deployment of the report entitled ‘The Good, the Bad & the Ugly’, which crystallized a single message for the media – Equitable Life was ‘ugly’ and not to be trusted. Equitable’s discursive event illustrates the many touchpoints of PR activity in highly competitive markets, and the importance of recognizing that size is not always commensurate with power when communicating in UK financial discourses.
The Mutual Life data set represents a smaller market with fewer expert groups engaging PR services and competing for trust. Instead, this discursive event illustrates long-standing mistrust between the government and private sector elites. The Jamaican government engaged in system trust production where necessary, but was equally capable of using coercive power to impose discursive silence on Mutual Life. Fewer expert groups proliferate and compete with each other in Jamaica’s smaller market, resulting in fewer, smaller PR firms and in-house press teams. However, PR professionals operating in smaller financial markets must contend with the state’s greater prominence on the financial trust pyramid, allocating both discursive and coercive powers to the state over domestic financial activity. The Jamaican data set further reminds us that governments, too, engage in PR techniques in order to produce trust and mistrust among publics.
Trust practice framework
My analysis of both data sets reveals a range of strategies performed by various financial actors, which I have categorized as five sets of trust practices – protecting, guaranteeing, aligning, opening up (making transparent) and simplifying; details of the five trust practices are illustrated in Table 2. The resulting framework explains how both trust and mistrust are produced: For example, if a financial institution fails to enact a trust practice, it can generate mistrust. Likewise, when experts contest the trust practices of other experts, they open up a discursive space for mistrust. The more material (therefore powerful) the failed trust practice, the more likely trust is to be destroyed. Support for the trust practice framework is evident across trust literature, and builds the case for positioning trust practices as a specialist field of expertise.
Trust practice framework
The first trust practice is the act of protecting customers’ assets, reflecting the crucial role protecting and safeguarding play in building trust (Baier, 1986; Cook, 2005). In financial markets, protecting and safeguarding includes the ability to produce a reasonable financial return (Arthur W. Page Society, 2009; Hilton, 2004; Shapiro, 1987). This first trust practice is both discursive and material, and is the most important trust practice engaged in by financial institutions. As part of their trust identities, both Equitable Life and Mutual Life promoted their ability to protect and grow customer assets. Anticipating change and risk are also protective techniques (Gilbert, 2005; Shapiro, 1987), yet Equitable fell short when it failed to protect customer assets by not hedging risks posed by paying its GARs. Mutual Life’s guardianship broke down when it exposed customers to a large, undeclared loan.
The second trust practice is the act of guaranteeing: here financial actors must show evidence of certainty that they can produce concrete, measurable results in a specific timeframe. This second trust practice is further linked with honouring contractual obligations (Casson and Della Giusta, 2006). Guarantees are also implicit in high-quality products that deliver on customer promises (Arthur W. Page Society, 2009). Guarantees can be discursively represented through symbolic ‘trust marks’ (Golin, 2004) such as warranties, guarantees, seals of approval and league tables (Yandle, 2008; Zucker, 1986). Annuity Direct successfully generated mistrust in Equitable Life’s GAR products when it highlighted the insurer’s failure to stand by the guarantees stated in its policies.
The third trust practice involves aligning; that is to say, ‘performing’ trust by obtaining certification and codification from other trust systems and codes. Individuals can align by completing approved licensing and examinations, while institutions can align by joining formal trust networks such as professional and/or trade associations (Shapiro, 1987), or by complying with audit and regulatory mechanisms (Yandle, 2008; Zucker, 1986). Trust guardians, who occupy the apex of Lapavitsas’s (2007) financial trust pyramid, institutionalize trust codes by setting standards and scrutinizing industry actors (Shapiro, 1987). Mutual Life’s auditing procedures were supposed to demonstrate alignment with trust codes, while guaranteeing protection of customer assets. When Mutual Life’s auditors refused to verify the accounts, a trust mark was withdrawn, thus producing mistrust in the insurer’s practices.
The fourth trust practice is that of opening up or making transparent by showing evidence of truth-telling and transparency (Bentele and Seidenglanz, 2008; Carolan and Bell, 2003). Such techniques include expressing ideas freely, while maintaining accountability. Both insurers chose to be transparent about certain company practices, using PR techniques to promote these. Equitable chose, for example, to emphasize its commission-free sales process, while Mutual Life promoted its support for low-income housing and for exports. However, life insurance is a fundamentally opaque industry based on complex probabilities with densely written contract terms. This reality was exacerbated when both insurers chose to conceal poor decision making and hidden risks on their balance sheets, thus negating any transparency and trust achieved through PR.
Finally, there is the trust practice of simplifying – here a financial institution will demonstrate expertise by explaining the way it conducts business in simple terms. Simplifying is a highly communicative strategy, often engaging PR techniques. As a means of trust production, simplifying involves providing accurate, timely and useful information (Fann Thomas et al., 2009); disseminating organizational messages that are consistent in quality, clarity and mode of delivery (Green, 2006). By contrast, organizations that generate discrepancies – intentionally or unintentionally – are more likely to produce mistrust (Bentele and Seidenglanz, 2008). Organizations produce trust when they make complex products simpler to understand, even when those products are not simple to implement (Allen and Santomero, 2001). Simplifying strategies also include the means by which an organization articulates its position on an issue to affected stakeholders (Fisher et al., 2010); by standing up for fairness and procedural justice (Cook, 2005), or demonstrating that they are acting in stakeholders’ best interests (Farrell, 2004) by simplifying as well as protecting. Annuity Direct, the IFA that contested Equitable’s GAR policies, exemplified this strategy well when it positioned itself as a consumer champion by naming and shaming ‘The Good, the Bad & the Ugly’ among UK annuity providers.
Ultimately, the trust practices framework demonstrates that the link between PR and trust production is more limited than imagined by normative PR theories. Much of the work involved in producing trust in financial services ‘belongs’ to other experts throughout the system. PR practitioners are not responsible for the act of protecting assets, nor are they in a position to make guarantees, although PR may promote the existence of such guarantees. PR does support openness; statements deployed through PR can increase market transparency (PR can also be an accessory to concealment of unwarranted activity). PR is most closely associated with the discursive trust practice of simplifying – selecting and rejecting messages about financial institutions, explaining and clarifying these messages, and contesting statements deployed by other financial actors. PR professionals can therefore be counted among a range of agents acting as ‘trust intermediaries’ in global discourses, performing discursive trust/mistrust practices in respect of a wide range of texts.
Reframing trust, power and PR
The purpose of this study has been to reframe trust, power and public relations in global discourses by exploring ‘booms and busts’ of trust in financial markets where trust is particularly crucial to business operations. The study was set against the background of concerted efforts to position PR practitioners as ‘trust strategists’ in global systems, an effort that can be directly traced to global PR agencies and professional associations as they expand their worldwide presence. The reframing took place through a set of processes: First, by shifting the trajectory of PR research to focus on system trust, a view first introduced by German PR theorist, Günter Bentele, but one that has received little prominence in broader PR scholarship. The second part of the reframing established the link between system trust relations and power relations through discourse by revealing some of the strategies used to produce trust in global financial discourses. The third part of the reframing involved locating PR activity within discursive moments of trust/mistrust production, repositioning PR as a ‘trust intermediary’ in global discourses, focusing on PR’s broader societal role and using Foucauldian approaches to locate PR within a circuit of discursive relations linking trust and power.
Using the work of Giddens (1990) and Foucault (Faubion 2002[1994]; Foucault 1981) to deconstruct trust production in financial systems is productive, revealing the intimate and fluid connection between trust, power and PR, especially when systems are shifting and unstable. There are, of course, substantial limitations to the approach used – it is difficult to know whether my conclusions will stand up to further discourse analyses of different events, different country markets and different PR activity.
The study has various implications for PR scholarship: First, it provides a new direction for trust-related PR research, moving away from normative emphases on measuring trust as a variable of organizational–public relationships. New directions in trust research should acknowledge a space for system trust as well as mistrust, while continuing to question presentations of PR as a trustworthy pursuit (L’Etang, 2005, Moloney, 2005). Future research directions also include broader application of the trust practice framework, exploring PR’s enactment and promotion of trust practices in various sectors. It would be useful to know, for example, what other trust practices exist and whether they exert similar influence in different sectors. In addition, the specific circumstances of trust/mistrust production merit further investigation. For example, the circumstances in which trust production is resisted, and the potential use of PR techniques in such resistance, would be of interest. It is also crucial to understand the variability in the outcomes of these discursive processes, given that certain aspects of PR work are increasingly transparent and widely understood by various stakeholders.
This study also provides useful implications for PR practice, specifically the legitimacy of the ‘trust strategist’ role for PR. The range of structural trust roles and trust access points suggest that trust production is a shared performance by many expert fields, weakening PR’s trust strategist claim. Yet PR has helped to define the boundaries of trust discourses, functioning as a tool of elite conflicts at the expense of other stakeholders (Davis, 2000). As such, the PR field bears some responsibility for understanding trust processes better than it currently does. PR’s narrow focus on organizational trust has left organizations unable to visualize patterns of trust production within and across the systems in which they operate. The trust practice framework produced here, while simple in its approach, provides the early basis for a communicative model that would allow corporate executives to ‘see’ inside their organizations and across the systems in which they operate in order to understand specific trust practices, their professional touch points and the influence that external experts and laypeople can exert over the success or failure of these practices.
This study represents my own personal journey through more than 20 years of PR practice in financial markets spanning Jamaica and the UK. While I had no direct links with the two data sets, I have helped financial institutions to build trusted reputations, only to see them collapse, while institutions that engaged in similar questionable practices remain standing. It is my belief that the PR profession’s focus on restoring trust after corporate failures has happened at the expense of understanding power relations, and the deliberate production of mistrust. PR’s real value as a field of expertise, therefore, may not be in managing trust but in managing mistrust (Welch, 2006). Rather than thinking about mistrust as a dangerous and destructive force, PR experts might embrace their role as trust intermediaries, introducing a more benign understanding of mistrust as a natural mechanism, a ‘caveat emptor’ for customers and an important means of exerting checks and balances on power elites. At the same time, I do not set aside the ‘trust strategist’ claim altogether: PR professionals are themselves discursively constituted, as well as producing trust discourses and contesting them. The future is therefore open to the possibility that new expert trust roles can be discursively constituted and these new experts can contribute to new social relations of trust. It may well be that dedicated trust specialists will evolve, or that experts will work together to construct new trust relations in the years to come.