Trust deficit: what it means for directors in government

New Zealand’s public institutions have traditionally benefited from high levels of trust. That reputation, however, is becoming harder to sustain. Emerging data shows a softening of public confidence, particularly in government, creating a more complex operating environment for boards.

For directors in central and local government, trust is no longer just a reputational concern.  It now shapes strategic choices, underpins legitimacy and is essential to sustaining a credible licence to operate. Public sector boards must continue to recalibrate their approach accordingly.

As the Four Pillars of Governance Best Practice notes, “high standards of governance and accountability underpin trust in public services and our democratic system”.

Falling confidence

The Acumen Edelman Trust Barometer 2025 (New Zealand) reports that trust in government has dropped to 45%, down from 48% in 2024. In New Zealand, government now ranks as the second least trusted of the four major institutions - behind business (54%) and NGOs (53%), and ahead of media (35%). Trust is lowest among younger people, Māori and regional communities.

In contrast, the Public Service Commission’s Kiwis Count survey (June quarter 2025) found that 58% of New Zealanders trust the public service brand – a relatively strong result but one in gradual decline (down from 61% in the previous quarter, though still above pre-Covid-19 levels). As with the trust barometer findings, trust is markedly lower among disabled people, Māori and those on low incomes.

There is a similar dichotomy in Australia. Sean Innes writes in Of(f) Course Minister (2025) that “trust [in government] has slipped back to 48% . . .”  and that a government survey “. . . shows trust in public services (those provided by the government) has remained stable in recent years at 60%.”

Boards should treat these signals as indicators of shifting public expectations.

Trust as a governance priority

Boards govern on behalf of the public, not just their ministers or appointing bodies.
In a low-trust environment:

• • Strategic and reputational risks rise
  • Consultation requires more than procedural compliance
  • Communication must be more deliberate, inclusive and timely
  • Performance is measured not just by results, but by perceived fairness and responsiveness

Trust, in short, has moved from the communications team to the board table.
And it needs to be. The OECD 2024 report on its ‘Survey on Drivers of Trust in Public Institutions’ warns that diminishing trust in government “not only damages social cohesion and political participation, but also limits governments’ ability to function effectively”.

Implications for central and local government boards

The core message from this data is that boards across central and local government – including Crown entities, statutory bodies and council-controlled organisations – are operating in an environment where public trust is under pressure and scrutiny is intensifying. This is not just a reputational issue; it directly affects the board’s ability to govern effectively and maintain legitimacy.

In this context, boards should:

• • Elevate public trust as a strategic priority, embedding it into risk frameworks and decision-making processes
  • Strengthen relationships with iwi and tangata whenua, recognising their constitutional and cultural significance in governance
  • Enhance transparency and accessibility, making decisions easier to understand and engage with, especially for those who feel disconnected from institutions
  • Assess board composition through a trust lens, ensuring it reflects the diversity and lived experience of the communities they serve

The IoD offers practical support for the latter, including:

• • Getting on board with diversity: a guide to embedding diversity of thought and perspective in boardrooms
  • Future Directors host board pack: a resource for boards looking to support emerging governance talent and bring fresh perspectives to the table

Leading in a low-trust era

Boards cannot reverse national trends in public trust, but they can govern in ways that reinforce trust at the institutional level. Tangible steps include:

• • Regularly tracking trust and stakeholder sentiment
  • Building transparency into board reporting
  • Communicating decisions in plain language
  • Modelling ethical leadership and accountability

On ethical leadership, the second pillar of the Four Pillars of Governance Best Practice notes that “unethical behaviour ultimately damages companies and their personnel . . . and the loss of a hard-won good reputation can take years to rebuild”, and that “. . . tone at the top is part of the solution to ensuring the company is performing as an ethics champion”.

Conclusion: Trust is core business for public sector boards

Trust is no longer a soft metric or a peripheral concern. It is a central feature of modern governance in the public sector. For public boards, trust determines whether the public accepts decisions, supports reform and believes in the integrity of institutions.
In this low-trust context, trust is not a communications challenge – it is a governance responsibility.