Only 43% of employees trust their direct leaders; two in three question leadership quality

Only 7% of leaders worldwide are seen by their teams as striking the right balance between high performance expectations and genuine care and support, a combination deemed critical for long-term success, according to a new global study by the FranklinCovey Institute.

The findings paint a stark picture of eroding trust and mounting workplace pressures, with employees increasingly giving their leaders poor marks. The report highlights a growing disconnect between the kind of leadership organisations need to navigate ongoing disruption and what employees say they experience on a daily basis.

Trust, a cornerstone of effective leadership, appears to be in short supply. Fewer than half of employees (43%) said they trust their direct leaders, while two in three expressed low confidence in the overall quality of leadership today. Meanwhile, 62% described their leaders’ management style as outdated, and 80% characterised their managers’ approach to AI leadership as largely “hands-off.”

“Drawing from our proprietary global research, leadership surveys, and interviews with executives across industries, this timely report identifies a widening gap between the type of leadership organisations need to thrive, and what most employees experience today,” said Adam Merrill, Executive Vice President of Market and Customer Intelligence at FranklinCovey.

Leadership under pressure

The findings come at a time when executive roles are becoming increasingly complex. 

Separate data from Russell Reynolds Associates (RRA) shows CEO turnover reached a record high in 2025, underscoring what the firm described as a “materially more complex and harder” role amid economic volatility, political uncertainty, and heightened investor scrutiny.

FranklinCovey’s research highlights three core challenges confronting leaders: continuous disruption, diminished trust, and the rapid advance of artificial intelligence.

“These forces seem almost engineered to fuel self-doubt and put leaders into a defensive posture,” the report noted, adding that competing and interconnected demands are straining leaders’ judgment and endurance, often at the expense of meaningful human connection.

The report found that 87% of leaders view disruption primarily as a threat to survive, while only 13% see it as a strategic opportunity for innovation and growth. This survival mindset, the authors argue, narrows leaders’ vision and limits the organisation’s potential.

AI: A defining leadership test

Artificial intelligence has emerged as a defining test of leadership capability. As AI adoption accelerates, many employees are increasingly inclined to trust AI tools over managerial judgment, further eroding confidence in human leadership.

According to the report, organisations are struggling to maintain connection and trust as AI reshapes workflows and decision-making.

“Our message to the C-suite: AI has the potential to be a transformative lever for growth and performance, if people aren’t an afterthought,” the report stated. “People can change with AI to drive change, but only with great leaders.”

Building better leaders

Despite the bleak assessment, the report stresses that leadership excellence is not innate but developed. “There’s a great need for exceptional leaders who can navigate disruption and transform teams and organisations, while carefully balancing high demand and high care for all stakeholders,” said Paul Walker, Chief Executive Officer of FranklinCovey.

The report argues that great leadership cannot simply be hired or discovered by chance. Instead, it must be cultivated through deliberate practice, reinforcement, and organisational commitment.

“Great leadership isn’t a genetic gift, but it’s a capability that can be built, practiced, and multiplied at every level of the organisation,” Walker said, adding that leaders who sustain both high trust and high performance will be best positioned to deliver breakthrough results in 2026 and beyond.

As workplaces confront accelerating change, the message from the report is clear: without rebuilding trust and rethinking leadership for the AI era, organisations risk limiting not only their people, but their performance as well.