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2017 Edelman
Trust Barometer
Special Report:
Institutional Investors
Executive Summary |

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Methodology
Edelman 2017 Trust Barometer Special Report:
Institutional Investors captures insights from
a powerful group of global institutional investors.
This research was completed in partnership with Ipreo, a
leading global provider of financial services technology,
data and analytics. Edelman surveyed chief investment
officers, portfolio managers and buy-side analysts across
14 countries whose firms collectively manage more than $1
trillion in assets using various investment styles.
The research supplemented Edelman’s respected
Trust Barometer launched annually in January at the World
Economic Forum. Now in its 17th year, the Trust
Barometer measures global trust in four main institutions:
business, government, media, and NGOs.
Edelman’s Institutional Investor research is based on an
online survey of 101 institutional investors. Respondent
breakdown was as follows, and represented firms that
manage assets ranging from less than $500 million to more
than $50 billion USD:
Portfolio managers 52%
Chief investment officers 24%
Financial analysts 24%
Directors of research 5%
Data fieldwork was conducted by Edelman Intelligence
between June 20 and July 18, 2017.
View the findings report here:
https://www.edelman.com/trust2017/institutional-investors/
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Contents
03 Building Investors’ Trust
Enhances Corporate Valuation
05 Politically Charged Environment
Creating New Concerns
06 Investors View Themselves
as Agents of Change
07 Investor Trust Goes Beyond
the Financials
11 Operationalizing the Findings:
Rethink and Retool Your Practices
to Accommodate New Realities
09 A Forward-Looking Narrative
is Essential for Building Trust
22017 | Edelman Trust Barometer | Institutional Investors
13 New Challenges and
Expectations for Building Trust
with Institutional Investors

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Make no mistake: Trust matters
to institutional investors. To them,
trust in a company is a critical variable
underpinning their investment decisions.
Consider these significant findings:
if institutional investors trust a company,
77% invested or increased their
position, 60% praised it to a peer,
53% persuaded others to invest and 50%
voted in favor of the Board, in the last 12
months.
Investors are just as action-oriented for
companies they distrust: 73% did not invest in
the stock, 71% underweighted these
companies’ stocks, 41% criticized the
company to others and 37% voted against its
board.
Building Investors’ Trust Enhances
Corporate Valuation
Investors Take Action Based on Trust
Behaviors for Trusted Companies
77
60
53
50
39
32
Invested in stocks or increased my position
Praised them to a peer
Persuaded others to invest
Voted in favor of the Board of Directors
Voted in favor of management
Supported a merger
73
71
41
37
37
23
Behaviors for Distrusted Companies
Did not invest in stock
Underweighted these companies’ stocks
Criticized them
Persuaded others to sell their stock
Voted against the Board of Directors
Supported an activist investor
Percent who have taken each action in the last 12 months
in relation to companies they distrusted and trusted
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More than 80% of institutional investors agree
that trust in a company is important when
considering an investment, 87% indicate that
trust in management is a prerequisite to
making or recommending an investment and
94% agree that trustworthy companies
deserve a larger premium.
Trust proves so important that eight in
ten respondents identify it as the most
important attribute when making investment
decisions – ranking ahead of valuation
versus peer companies (75%), historical
performance and ability to meet financial
guidance (both at 70%).
agree that they must trust a company’s
management before making or
recommending an investment
87%
say “my trust in the company”
is important when considering
a company to invest in
82%
94% agree
trustworthy companies
deserve a larger premium
76% say
ethical standards are
important when
considering a company
to invest in
42017 | Edelman Trust Barometer | Institutional Investors

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62017 | Edelman Trust Barometer | Institutional Investors
Institutional investors
state that a more politically
charged environment is
creating new issues for
companies and they cite
low trust in traditional
watchdogs.
Investors echo broader
concerns raised in the
2017 Edelman Trust
Barometer, which showed
trust in all four institutions
(NGOs, business, media
and government) in
decline.
When asked to look back
on the economic and
political environment over
the last 12 months, 54%
of investors said they were
negative or neutral about
the current investing
climate. When asked to
look 12 months ahead,
these investors were
meaningfully more
pessimistic, with nearly
three-fourths (72%)
describing themselves
as having a negative or
neutral outlook. Not
surprisingly, 79% of
investors agree that
a country’s political climate
impacts the companies
in which their firms invest.
Importantly, nearly half of
investors agree that most
companies do not fully
acknowledge the new risks
to their business from the
current political climate.
Investors’ apprehension
is compounded by low
confidence in regulators,
government and media
– institutions that
traditionally played
important watchdog roles.
Only 28% of investors
have trust in these
institutions, with faith
in rating agency
representatives,
government officials
and business/financial
journalists at only 28%,
19% and 17%, respectively.
Politically Charged Environment
Creating New Concerns
Nearly 1i n 2
investors agree that
most companies do
not fully acknowledge
the new risks to their
business from the
current political climate
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Investors View Themselves
as Agents of Change
76% say
you should address one
or more of these issues
Institutional investors say
they take an active stance
with respect to the companies
in which they invest. Investors
surveyed view themselves
as agents of change, with
nearly half (49%) believing
their firm’s actions can
play a meaningful role in
influencing a company’s
corporate governance.
Further, institutional investors
overwhelmingly admit their
willingness to support activist
investors. Seven in eight say
they will support a reputable
activist investor if they believe
change is necessary at a
company in which they invest.
Additionally, 80% say that
most companies are not
prepared to handle activists’
campaigns targeted at them,
a response that should
concern management
teams and boards.
While environmental, social
and governance (ESG) risks
ranked low as factors driving
investment decisions, one in
three investors say they are
becoming more attentive to
ESG and have changed their
voting and/or engagement
policies regarding these
issues. Companies must
be prepared for ESG to draw
increasing focus among
investors over time.
Taking a Public Stand
on Social Issues
In what Edelman believes
is one of the survey’s most
compelling findings, 76% of
investors expect companies
to take a public stand on
societal issues to ensure the
global business environment
remains healthy and robust.
This new research shows
that investors and the public
alike are looking to business
to take a stand on the issues
of the day and fill the void
left by the implosion of trust
in government.
Issues on which companies have an urgent obligation
to take a public stand on to ensure the global business
environment remains healthy and robust
Most selected
Least selected
Education reform/training
Environmental issues
Free trade
Automation of workforce
Income inequality
Gender issues
Workplace diversity
Immigration
Globalization
Outsourcing
62017 | Edelman Trust Barometer | Institutional Investors

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02
Investor Trust Goes Beyond
the Financials
Building trust is essential
for winning support from
investors, and therefore is
a critical factor in influencing
financial valuation. However,
trust can be built with
investors through a variety
of non-financial actions.
Our research revealed that
investors are closely watching
how a company conducts its
business to determine trust.
Investors consider how
companies treat employees
and customers when
making investment
decisions. 87% of institutional
investors say that customer
service satisfaction impacts
their trust and therefore
investment decisions. They
also agree that declining
customer satisfaction and
product quality have the
greatest negative impact
among a range of potential
adverse factors. Given how
widely available customer
satisfaction information
is today – including industry
ratings, customer reviews,
proprietary channel checks,
investigatory websites,
regulatory actions – scrutiny
of how companies treat
customers is more intense
than ever before.
Investors similarly
recognize the positive
impact of an engaged
employee workforce on
corporate performance.
69% of investors agree
that prioritizing a company’s
employee commitment has a
clear and constructive impact
on trust. Conversely, one in
three agree that a poor
relationship with employees
detracts from trust. Employee
sentiment is, of course, highly
visible on Glassdoor and
social media, and companies
should understand that
it increasingly factors into
investors’ assessments.
87% say
a company’s customer
service satisfaction
impacts trust of a company
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In addition, investor trust is
influenced by a company’s
reputation and track record
of innovation, which
reflects the company’s
commitment to staying
ahead of disruption.
86% of investors say a
company’s reputation for
innovation impacts their
trust and 75% say R&D
and innovation are a driver
of investment decisions.
Unsurprisingly, trust
in a company’s Board of
Directors is fundamental
to driving company trust,
posing interesting
questions about the
reputation of the Board
within the financial
community.
Two in three investors
say they must trust a Board
of Directors before making
or recommending an
investment.
Nearly as many assert that
an engaged and effective
Board is important when
considering a company
in which to invest. Investors
also view Board and
managerial stability as
critical: 62% say frequent
board or management
turnover damages trust
in a company.
And investors want to be
treated equitably, with 77%
saying that providing equal
voting rights to all share-
holders impacts their trust
in a company.
Edelman’s research shines
a spotlight on how company
Boards are viewed externally
and should compel
companies to consider
which strategies would be
appropriate to strengthen
their reputation and what the
role of the Board should be in
that process.
66% must trust
a company’s Board of
Directors before making or
recommending an investment
82017 | Edelman Trust Barometer | Institutional Investors

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Our study also revealed
essential learnings for
how companies should
communicate with investors.
A clear and well-communicated
corporate strategy is mandatory:
virtually all respondents (99%)
say that they trust companies
that have a well-defined strategy
more than those that do no.
Nearly four in five (79%) favor
companies using more forward-
looking disclosures. And 58%
said that current disclosure
requirements are not doing
enough to maintain their trust,
implying that companies
should go beyond what
is statutorily required.
agree that current disclosure
requirements are not doing
enough to maintain my trust
58%
agree I trust a company that
provides forward-looking
guidance but misses
occasionally more than I trust
a company that provides no
forward-looking information
A Forward Looking Narrative
is Essential for Building Trust
99% agree
I trust companies that have
a clear strategy more than
those that do not
59%
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Finally, reflecting their long-term
orientation, 86% of investors assert
that companies that focus on short-
term results do not benefit their
investment strategy. And two in three
investors (68%) say that providing
long-term guidance on financial
performance positively impacts trust.
What actions can a company’s management team take to earn your trust?
“Clear and frequent communication
on strategy, targets to meet and how
they will and how they have delivered
on the stated goals.”
- Portfolio manager,
mutual fund, $50
billion USD AUM
agree companies that focus
on short-term results do not
benefit my investment strategy
86%
“Clarity in strategy and purpose,
adopting a true long-term
perspective that is articulated to
all stakeholder[s]…”
- CIO, institutional asset
manager, between $10
and $50 billion USD AUM
102017 | Edelman Trust Barometer | Institutional Investors

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Operationalizing the Findings:
Rethink and Retool Your Practices
to Accommodate New Realities
To succeed in this challenging environment,
companies must recognize investors’
heightened expectations and build new
communications and engagement
behaviors into their corporate governance,
investor relations and financial
communications strategies.
Consider the following actions for
companies seeking to increase institutional
investor trust:
1. Articulate long-term business strategy
clearly and feature in all communications,
including quarterly earnings, digital assets,
broker conferences and one-on-one and
group meetings.
2. Explain how corporate strategy supports
the investment thesis, describe how capital
allocation policies support that strategy,
and use the 10-K, proxy statement and
other communications to explain the
financial and nonfinancial key performance
indicators that demonstrate that the
strategy is on track.
3. Communicate additional factors critical
to achieving success. Given that half of
investors surveyed agree that most
companies employ outdated ways to
share information for investor relations
purposes, the status quo is insufficient.
4. Identify, explain and take a public stand
on issues important to the business
model - including, for example, continued
access to human capital from abroad,
free trade, sustainable agriculture or
training and education.
5. Financial communications should include
information such as customer service
metrics, context on supplier relationships,
and channel partners. Effective trust
builders will also share with investors their
measures of employee engagement, which
many companies produce, and show how
quantitative measures of human capital
– such as longevity, turnover rates and net
promoter scores – position their company
for success in the competition for talent.
“Trust in the Company”
Most Important Driver
of Investment Decisions
Percent who find each company attribute
important when making investing decisions
70
70
74
75
76
82
Ability to meet financial guidance
Historical financial performance
Product R&D/Innovation
Current valuation versus peer companies
Ethical standards
My trust in the company
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6. Recognizing the emerging importance
of how a board is viewed externally and
especially by the financial community,
public companies need to take steps
to increase the Board’s reputation.
Mechanisms for doing this include both
effective proxy communications and an
active program of investor engagement
to build understanding of Board priorities
and alignment with investors. Determining
how and when Board members should
participate in investor engagement is
of paramount importance. More specifically,
addressing perceived inequities, such as
dual classes of shares, and communicating
about factors underlying corporate
performance, will further position
a company for success.
7. Communicate from the inside out. In
today’s distrusted environment, companies
will be well-served by employing a broader
bench to communicate information to
investors. The C-Suite, trusted by 70%
of investors, is a given, but investors highly
regard information from company technical
experts, such as engineers and scientists,
trusted by 74% of respondents, and the
company’s Lead Independent Director,
trusted by 69% of investors. Consider also
how to share the voice of your regular
employees in investor communications, as
they are trusted by 59% of investors; and
outside academics or experts with relevant
expertise, viewed as credible by 57% of
investors.
57
59
6970
74
Keep in Mind that Credibility is Not Exclusive to the C-Suite
Percent who would find company information from each spokesperson credible
A technical
expert within
the company
(e.g. engineer,
scientist)
C-Suite Independent
Lead Director
of a company
A regular
employee of the
company (within
compliance
regulations)
A business/
financial
academic or
expert on that
company’s
industry issues
122017 | Edelman Trust Barometer | Institutional Investors

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Edelman’s research describes a world in
which trust is declining globally and investors
are willing to act as “agents of change” to
ensure a company is delivering on its
commitments and potential. For public
companies and their Boards, the silver lining
is that investors overwhelmingly want a robust
dialogue that is long-term in its orientation,
based on a sound understanding of the
company’s strategy and the factors that
enable it. By communicating from the inside
out, taking steps to be visible on public issues
that impact its business, being attentive to
perceptions of its Board and management,
and building new fundamentals into their
corporate governance, investor relations and
financial communications practices, forward-
thinking companies will be well-placed to build
trust and meet the challenges of today’s
demanding environment.
New Challenges and Expectations for
Building Trust with Institutional Investors
Take a Stand
on Public Issues
Board Reputation
Matters
Prioritize Your
Employees
Improve Customer
Satisfaction
Stay Ahead of
Disruption
Provide Equal Say
Ensure Clear Strategy
Focus on the
Longer-Term
Keep Investors
Well-Informed
Go Beyond
Requirements
Use a Broader Bench
New Considerations Upgrade Fundamentals Trust
Drives
Valuation
and
Investment
Decisions
New Risks from
Political Climate
Investors as
Agents of Change
Negative Outlook
ESG Emerging
Low Trust in
Watchdogs
New Challenges
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Edelman Financial Communications &
Capital Markets is a boutique strategic
consultancy with the reach and resources
of a leading global communications
marketing firm. We advise public and
private companies on strategic and
capital markets communications to help
effectively position them with the financial
community during transformative events
as well as during the normal course of
business. Clients choose to work with
us because of our specialized and
experienced financial communications
team, our ability to provide the full range
of Edelman’s services (such as digital and
social media, public affairs and employee
engagement) as well as our ability to
access Edelman’s global network with
more than 65 offices around the world.
About Edelman’s Financial
Communications Practice
For additional information please contact:
Ted McHugh, Senior Vice President
212-819-4875 or Ted.McHugh@edelman.com
Julia Sahin, Senior Account Supervisor,
212-738-6131 or Julia.Sahin@edelman.com
2017 | Edelman Trust Barometer | Institutional Investors 142017 | Edelman Trust Barometer | Institutional Investors

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