People

Do You Trust Your CFO?

New evidence says employee trust of senior management has a direct impact on bottom-line results. Plus: HLM Design draws on a new finance chief; an...
Lisa YoonAugust 21, 2002

Would employees buy a used car from you? If not, the company’s stock price and bottom line may suffer…

According to a survey to be released next month by consulting firm Watson Wyatt, employee confidence and trust in senior management has a direct effect on a company’s bottom line…

Indeed, when employees don’t trust management, they don’t feel motivated to turn in a stellar performance… Survey author and Watson Wyatt national practice leader Ilene Gochman likens the scenario to conducting a symphony: “You need everyone doing the right thing at the right time and delivering quality cost-effectively.”

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She also points out that senior executives who don’t garner employee trust won’t be able to focus those workers on corporate or department goals—or encourage them to go the extra mile… “Unless Corporate America can resolve the crisis of confidence among its employees, it has little hope of restoring the crucial trust and confidence of investors,” reckons Gochman…

As things stand, it doesn’t look good… The 2002 WorkUSA survey, which polled 13,000 employees working at all levels in various industries, finds that only 39 percent of employees trust senior executives of U.S. companies… Forty-five percent say they have confidence in the job being done by senior management, representing a 5 point drop from 2000, when the last survey was taken…

More workers (63 percent) believe their companies conduct business with honesty and integrity, but—and there’s no surprise here—that’s also a drop from the last survey…

So what does that mean for the corporate bottom line? Over three years, the rate of total returns to shareholders is almost three times lower at companies with dismal levels of worker trust than it is at companies with high trust levels, Gochman says…

To restore employee trust and confidence, company executives should start with a review of internal-communications processes and management of business change… “By assessing just how far trust levels have fallen…company executives can gain insight into the depth of the problem among their workers and establish a baseline against which to measure the success of their efforts to restore trust,” asserts Gochman…

The complete survey looks at employee attitudes toward decision-making and business strategy, work-related change, communication, human resources effectiveness, pay and benefits, and performance management…

>> William S. Shropshire Jr. has designs on top finance post of architecture and engineering firm HLM Design Inc…. Shropshire joining company from Charlotte, N.C.-based Dyersburg Corp., where he was EVP, CFO, secretary, treasurer, and director… Prior to that, he was SVP, CFO, and treasurer of Charter Bancshares Inc….

>> Norak Biosciences Inc. improves its gene pool by appointing Peter J. Heath VP of finance and CFO… Biotech vet previously held same posts at Xanthon, a private biotechnology company in Research Triangle Park, N.C…. He was also finance chief of Medtox Scientific Inc. before acquisition by Editek Inc., a St. Paul, Minn.-based toxicological diagnostics company, and corporate controller of Granite Technological Enterprises Inc., also acquired by Editek…

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