Greg Clark, Britain’s new City minister recently put the message bluntly. Britain’s financial services industry needs to “re-build trust as a matter of urgency.” Nor is it just the financial services experiencing a serious trust deficit.
Numerous studies confirm trust of organisations and their leaders has taken a beating in recent years. The bigger the organisation the worse the levels of trust tend to be. The increase in discussions and debates about trust in recent years go far wider than banking or financial services. As a recent CIPD report put it:
“They are “symptomatic of deeper concerns in the UK about the nature of employment, the intentions of employers towards their workforces and changes in employees’ expectations of both their employers and their senior managers in the twenty-first century.”
These leaders are struggling with these issues and the implications for re-gaining trust. Some are succeeding, others are less active and some wonder if the whole effort really matters. Perhaps trust is just a “nice-to-have” rather than an essential?
A CIPD survey in 2011 shows why trust is so critical and not just an option. The trust an organisation earns, directly affects its reputation. Sooner or later, reputation works its way down to the profit and loss bottom line of the organisation. So the big payoff from raising trust levels comes when a company decides it needs to re-build its shredded reputation and establish a more ethical culture.
Companies in search of a more ethical culture need employees willing to speak up, if they encounter unethical behaviour. This could mean confronting another employee, talking to their line manager or calling a hot-line. In all cases they need to believe they will get support for their actions, and if necessary, someone in authority will listen and take remedial action.
DO YOU TRUST YOUR
To be trusted research shows leaders must show
- ability – demonstrable competence at doing their job
- empathy – a concern for others beyond their own needs and having benign motives
- integrity – adherence to a set of principles acceptable to others encompassing fairness and honesty
- predictability – a regularity of behaviour over time
Without sustained high levels of trust employees are unlikely to take the responsibility to do anything about practices that potentially threaten the company’s reputation.
For those wanting to improve trust levels there are at three main routes to achieve change. First they can aim for a much greater degree of employee engagement. This has been and continues to be subject to great interest and research since it too directly affects profitability.
Secondly, it could mean building the superstructure for regulatory systems complete with ethics committees, codes and compliance weaponry, including dedicated professionals with titles like Corporate Ethics and Compliance Officers.
Thirdly, there are the voluntary efforts of leaders to show they care about running an ethical business and expect others to care too. This too builds trust as employees realise their senior management is serious about rewarding ethical behaviour and will act ruthlessly against unethical practices.
Though re-building trust is certainly a matter of urgency for so many organisations, as the City Minister argues, the harsh reality is it will not be a quick fix. Antony Jenkins the new CEO at Barclays explained what it meant for his organisation, he expects renewal to take years, rather than months. Anyone else on the same journey should not expect any short cuts along the way.