British business growth is being undermined from within by widespread mistrust of senior managers, according to a new report.

The survey published by the Chartered Management Institute (CMI) and leadership events specialist Top Banana, found just one in three (36 per cent) of the 1,456 middle managers surveyed for The Middle Manager Lifeline say they fully trust their senior leaders.

This breakdown is corroding wider employee trust in organisations, with four in five middle managers believing that staff lack full trust in their CEO.

Mistrust of the boss is found to be closely linked to business performance and growth. It found 85 per cent of business leaders and managers agree trust is critical to business performance: the report finds that fast-growing organisations are four-and-a-half times more likely to report a high degree of trust between middle and senior management.

Low trust levels reflect a communication breakdown, with only 37 per cent agreeing that their leadership team is transparent. This ‘trust gap’ means only 31 per cent of managers are ‘very confident’ in communicating company guidance and strategy to their teams.

The trust gap is particularly worrying in the wake of the Brexit vote, according to Ann Francke, CMI chief executive, who says:

“The Brexit vote reflected a breakdown of trust in politicians, businesses and other institutions. Rebuilding it isn’t just a requirement of our political leadership – it’s a profound management challenge for the nation.

“These findings are a warning that a communication breakdown between leaders, middle managers and employees more widely is undermining growth. Leaders have to recognise the pivotal role played by middle managers at the heart of their organisations and support them to succeed in the months and years ahead.”

Middle managers interviewed for the report want greater transparency from the top: they want senior leaders to reveal their thinking on important issues (63 per cent) but also to admit their mistakes (54 per cent) and encourage people to raise issues (51 per cent) with them. At present, less than one in ten (9 per cent) are given the chance to feedback on information they’re required to share with their teams as a matter of course.

The result is a gulf in perceptions between senior leaders and middle managers. Some 72 per cent of leaders think that they’re highly trusted as a manager – yet only 36 per cent of middle managers say that they trust their business leader to a great extent.

Bridging the gap between senior leaders and middle managers has never been more important, according to Nick Terry, co-founder and managing director of Top Banana, who says:

“There is a clear trust illusion in our organisations. Business leaders may think that it’s there but the reality is, the further away you get from the leader, the more of an issue trust becomes. Ultimately, trust is personal and therefore leaders need to create opportunities to communicate with their managers candidly, honestly and with an open heart.

“The UK’s business landscape has changed unrecognisably with an informed, empowered generation of people entering the workforce. They’ve grown up with information at their fingertips and nothing less than the truth will wash. There’s never been a more important time to build the bridge between leadership and middle management.”

The report sets out five essential elements for organisations to bridge the trust gap, recognising middle managers as the key connectors across organisations and creating ‘CIVIC’ engagement across the workforce.

1. Communications – committing to an open and honest relationship with middle managers.
2. Integrity – challenging everyone, regardless of seniority, to act according to stated values
3. Visibility – ensuring those at the top are seen to be accountable for their actions and open to challenge
4. Interaction – creating meaningful opportunities for colleagues to meet and feedback to senior management
5. Connections – investing in training and development at all levels to equip them with the professional skills to communicate and manage their teams