It's not likely that you or anyone else will take notice or recall any situations in which you gained trust in a company. On the flip side, you'll almost definitely recall one or more situations in which you lost trust in a company. That's because the lack of organizational trust has long-term effects on a company and it usually affects the bottom-line profits. The Wells Fargo fraud scandal is a perfect example of that.
It's a common mistake for boards to overlook the importance of trust in today's competitive corporate environment. Having a sense of higher organizational trust results in increased employee engagement, higher employee retention and less fear. Trust in an organization fosters innovation and elevates the level of transparency, accountability and communication, which form the basis for good governance. It's essential to have your corporate board's involvement in organizational trust within their business strategy to incite faster decision-making and to make the company more profitable. In fact, the top 10 most trustworthy companies outperformed the S&P 500 by over 25% since inception, according to Trust Across America. Also, for six years' running, the top 10 most trustworthy companies had higher returns than the S&P 500.
Unilever's CEO, Paul Polman, stated at the 2016 annual conference of the Arthur W. Page Society that he believes that there can be no genuine prosperity without trust in companies. He also stated that 75% of graduates in the United States don't want to work for big companies anymore because they don't trust them.
In most cases, the board's involvement in organizational trust should be greater than it is and it's not that boards aren't interested in it. Usually, it's a matter of prioritizing it and helping boards understand the importance of organizational trust in practice as well as the importance of reinforcing it. From a profitability standpoint, it's risky for boards to ignore the value of trust as an asset.
Knowing How to Define Trust and Understanding How to Build It
Organizational trust starts internally. It runs from the inside to the outside and from the top, downward. It's something that boards shouldn't take for granted. Boards, legal teams, compliance teams, human resources teams, financial teams and others should assess their priorities according to the Basic Principles of Trust as defined by Trust Across America. Discussions about trust will help them to find discrepancies in their thinking, get on the same page with their priorities, and begin the process of communicating them outward and downward. The public relations and corporate communication departments have a role, but boards cannot simply delegate the process to them completely. Purpose, reputation, sustainability and data privacy all play a role in building trust, but they aren't a substitute for it.The Boards Involvement In Managing Organizational Trust
In 2017, Trust Across America, Trust Around the World's global Trust Alliance, worked on a plan to create universal trust that could be applied to any size organization. The Alliance is made up of a group of professionals that include board directors, C-level executives, human resources, marketing, compliance and ethics, risk managers, finance managers, accounting representatives and customer service professionals. The variety of professionals is intentional, as they wanted to have a broad cross-section of perspectives for discussions around trust. The initial group established almost 90 ideas around the issue of trust. The group met for a year using a powerful decision-making software tool before finally homing in on the top 12 principles of trust for organizations. When put into the proper order, the principles form the acronym 'TAP INTO TRUST.' They are as follows: Truth: We are honest and humble ' we put the truth ahead of personal or professional gain. Accountability: We hold one another accountable ' we each take responsibility without regard to level or role. Purpose: We engage our stakeholders to build shared purpose ' we avoid short-term 'wins' that undermine future success. Integrity: We do what we say ' our everyday talk and actions are consistent. Notice: We seek out and listen to diverse perspectives ' every voice can matter. Talent: We reward moral character ' we hire and promote within our purpose and values. Openness: We are open and ready to learn ' we can be vulnerable and not have all the answers. Transparency: We reject hidden agendas ' we are transparent wherever and whenever possible. Respect: We respect each other ' we encourage questioning and create a 'zero fear' environment in which innovation can thrive. Understanding: We celebrate our successes ' we acknowledge and examine our failures with empathy and learn from both. Safety: We call out unethical behavior or corrupt practices ' we make it safe to be honest with no fear of reprisal. Tracking: We define and scorecard our performance against our value and values ' we measure both. The idea is to begin with an anonymous survey and to take stock of how various teams and departments within the organization view and prioritize the principles of trust. The results should provide the board with actionable insights on how to begin a trust-building program. Trust Across America continues to build on the early success of its TAP INTO TRUST program. The group introduced Phase II in March 2019, with a follow-up program called AIM Towards Trust, which is an acronym for acknowledge, identify and mend. This part of the program is less intensive, as it includes just one anonymous question on a one-minute survey that gives organizations baseline metrics for trust and assists them in addressing trust-based weaknesses. Organizations that are successful in building trust into the fabric of the organization decrease fear and increase a sense of security among all stakeholders. Organizations that have implemented Phase I and Phase II of Trust Across America report that their employees are no longer worried about job security and that they're more engaged, collaborative and innovative. Their customers have increased trust in their brand and shareholders believe the organization is carrying less risk. One of the many advantages of implementing modern governance solutions by Diligent Corporation is having software solutions like digital survey tools that boards can use to get started with a program to improve organizational trust. Boards can administer the tools anonymously and gather reports in various formats. The best part is that all collaborations and communications fall under the strong security of Diligent's platform.
