A version of this article was originally published on the World Economic Forum.
Trust forms the foundation of effective leadership, yet it is on the decline around the world . Evidence from various studies indicates that confidence in institutions, including businesses, is diminishing quickly, with many people feeling that leaders often deceive them. This decline manifests in organizations as disengaged employees, fragmented cultures, and a strained leadership pipeline.
Surveys by the Oliver Wyman Forum over the past five years, drawing on 300,000 voices across 20 nations, underscore the increasing severity of the problem. While nearly three-quarters of executives surveyed believe they understand their frontline employees, only one in five workers surveyed agrees.
This perception gap increases dissatisfaction, especially among younger workers who point out leadership’s lack of transparency, authenticity, and alignment with their values. The result is a prevailing sense that the entire leadership model is outdated, damaging morale among a more volatile and vocal multigenerational workforce, and weakening their performance and innovation.
But there is one exception to this worsening global phenomenon: developing markets. On average, employees in these countries report significantly higher trust and satisfaction in their leaders, scoring them 15 points higher than those in developed markets, according to the Oliver Wyman Forum. They also feel more connected to their companies and are more likely to believe senior leaders make decisions that benefit the entire workforce.
This contrast offers a powerful lesson: trust is not a given — it is a practice. So, what do leaders have to change? We see five effective levers to building trust for the long term: modernizing leadership models, communicating better, prioritizing emotional intelligence, studying successful internal cases, and creating new leadership systems designed to generate trust at scale.
1. Modernizing leadership models for the future workforce
The leadership models that served past generations feel increasingly archaic. In a world defined by rapid change, AI, and hybrid work, leaders must modernize their approach. The number of employees citing “subpar leadership” as a top dissatisfaction at work has jumped by 60% since 2023, according to the Oliver Wyman Forum. Nearly half say their company’s leadership model is outdated, and leaders are not connecting to their people.
Adding to the challenge, workplace teams now span five generations and don’t agree on what good leadership looks like. Younger workers are 40% more likely than boomers to want leaders to have a sense of mission or purpose, and almost three times as likely to believe bosses should prioritize employee needs over company needs. Members of Generation Z want decisions made with input from lower-level staff, while boomers believe they should be left to senior leaders.
The outcome is that both groups are experiencing frustration. Younger workers feel that leaders do not align with their values, whereas older employees feel a loss of clarity and control. The pressure on leadership arises from attempting to meet the needs of both groups simultaneously.
2. Strengthening clear and candid communication as a leadership skill
Transparency is non-negotiable, especially when trust is low. Leaders must openly communicate challenges and decisions, not just outcomes. More than 70% of employees cite failure to listen, care or make good decisions for their teams as key leadership failures, peaking above 80% among Gen Z.
A third of Gen Zers say transparency about company challenges is the single most effective morale driver, yet nearly half see it as a major leadership weakness. The frustration is one reason 38% of them would prefer an AI coworker or manager, which appeals when people crave consistency, transparency, and fairness.
Research indicates a bravery gap — the distance between how boldly employees want leaders to communicate and how cautiously leaders feel they must act. Employees are asking for clearer choices and stronger reasoning. They want clarity on trade-offs, values and the pressures leaders encounter.
3. Embedding emotional intelligence and proximity as leadership disciplines
Emotional intelligence (EQ) is now a structural requirement. Workers want their bosses to have emotional intelligence; they rank it among the top three leadership traits globally, and second for Gen Zers. They also would like more genuine contact. A third of employees want more in-person interaction with leaders, a 78% increase since 2021.
But EQ requires not only proximity, but also engagement with employees. Forget the scripted town halls and rushed leader drop-ins. Workers don’t want to be in the room for the sake of it. They want leaders who are curious and candid, who use the time together to explain the “why” behind tough choices, and genuinely seek employee feedback. Organizations can build these values into the culture by hard-wiring EQ into promotion decisions and encouraging all managers to communicate more effectively and show greater consideration.
4. Learning from emerging markets on leadership trust
Employees in emerging economies are much more satisfied with senior leadership — 67% versus 52% in developed markets. These employees feel connected to their companies and are more likely to believe that management makes decisions that benefit the entire workforce. Almost three-quarters say their companies value and seek their input on important topics, an 18-point advantage over developed markets.
While they may benefit more from the tailwind of rapid growth than peers in more stagnant economies or those with higher trust in institutions more broadly, the best emerging-market leaders provide frequent communication, clarity about company direction, and visible investment in employees’ futures. Global organizations can treat emerging markets not only as a growth engine, but also as a potential exporter of leadership strategies.
5. Elevating trust-based leadership matters more in the AI era
Trust functions like energy in organizations — generated, depleted, and renewed by what leaders do every day. In the era of AI, trust gaps have become a critical challenge that only humans can solve. This requires what we call trust reactors — leadership systems deliberately designed to generate trust. That means leaders who stay close to the frontline, communicate openly and honestly, invite early challenges and differing points of view, and keep their promises even when it’s inconvenient.
Machines can optimize work, but closing trust gaps is a uniquely human capability. The leaders who will thrive aren’t those with the best algorithms, but those who modernize their leadership models and place trust at the core of everything they do.
The takeaway is simple — falling trust levels stem from outdated leadership styles. Today’s employees want leaders who are open, emotionally intelligent, and present in everyday work. Even as AI becomes more common, only people can close trust gaps. Strong leaders build trust through consistent actions and keep it at the heart of everything they do.
Read the original piece here.