BUILDING TRUST IN BOARDS – A discussion by the European Confederation of Directors’ Associations (ecoDa)

In our contemporary globalized society, trust built over decades can be destroyed in a minute; therefore businesses must be more engaged in rebuilding trust by playing a responsible, responsive and sustainable role in society. This was the conclusion of a discussion organized by the ecoDa, following the World Economic Forum 2017 where “Responsive and responsible leadership” was discussed.

According to ecoDa chair Turid Solvang, “Boards of directors and senior managers have to take concrete steps to ensure that companies benefit from the trust not only of their shareholders but of all their stakeholders.”

In the new digitalized era it is highly challenging for businesses to gain and maintain trust.  According to a report by the Institute of Business Ethics, less than half of the British public believes that businesses behave ethically. Furthermore, according to the Edelman Trust barometer, too many people believe that the system is failing them and reject established authority. Even trust in media and NGOs has reached unprecedented low levels.

People expect businesses to take the lead and to contribute to the overall benefits of the society. Nevertheless, businesses need to take more steps in order to regain trust. Opaque decision-making without accountability to all stakeholders is no longer feasible in today’s society. According to Lutgart Van den Berghe, Chair of ecoDa Policy Committee, “the volume of information is no longer the reference, it is its relevance to all stakeholders that matters; disclosure is not the same as transparency.”  She also stressed that “transparency is not enough either, it is accountability that matters.”

Companies should build trust internally first and then externally. Competitive advantage will go to those who are most able to build trust-based relationships stemming from the sharing of deep, sustainable values and purpose. Reconnecting with employees, gaining their trust and using them as ambassadors is the only way for a business to succeed in today’s new digital industrial revolution.