Building corporate trust

In turbulent times like ours, it is all too obvious that trust matters enormously in business. But building trust beyond meaningless platitudes is harder than it looks, and there are plenty of examples of firms that get it wrong.

 

Companies must adapt to changing business contexts; that much is understood. But abandoning core policies overnight does not always sit well with customers. When the Trump administration went full-blast anti-DEI, for instance, many companies that had built DEI commitments into the heart of their HR strategy faced a genuine dilemma. Take Target, the US retail chain that had been openly and consistently pro-DEI. Challenged by an activist investor, Target’s management swiftly revoked its DEI policy while insisting the company would remain an inclusive place. The backlash from customers and workers was fierce: boycotts, reputational damage, and a lasting credibility problem. Clearly not the way to adapt while building trustworthiness.

 

Compare this to Apple, which faced a similar challenge. Tim Cook put the question to shareholders, who rejected an anti-DEI proposal by nearly 97%. This gave Apple room to acknowledge external pressure while standing firm on an investor-backed commitment. The company later signalled that its DEI policy wording might evolve, but within the bounds of its shareholder mandate. The contrast is instructive: Target’s strongest signal was that it would roll back its commitments under pressure; Apple’s was that it would honour them. Both companies changed course, but Target lost trustworthiness while Apple strengthened it.

 

That said, building trustworthiness is not merely a matter of the tone at the top. Robert Hurley, a long-time scholar at Fordham University in New York, uses the notion of "organisational capacity for trustworthiness" to capture how organisations continuously send out signals that stakeholders read and interpret. Some signals are positive, reinforcing existing beliefs and deepening trust. Others are negative, eroding those beliefs and nudging the organisation toward a tipping point. The task for leaders is to maximise the convergence of positive signals and minimise the negative ones.

 

A company is made up of many different roles, interacting through mandated structures to produce whatever the business does. But there are people in those roles, and the routines they develop to perform those roles constitute the signals they send. Whether a signal is intentional or not, others read the behaviour. Even silence is a powerful signal, one that stakeholders will interpret to form their view of a firm’s trustworthiness.

 

Most people want to be trustworthy employees. Yet, unaware of the signals they send while simply doing their jobs, they often contradict themselves and, in doing so, quietly undermine the organisation’s overall capacity for trustworthiness. My own research with compliance officers illustrates this well. Well-meaning compliance officers trying to make internal speak-up channels trustworthy quickly find themselves in a difficult bind because different internal stakeholders—boards, senior management, middle managers, workers—hold different, sometimes conflicting, expectations. Trying to be all things to all people makes it very hard to come across as credible to anyone.

 

Take competence, for example. Compliance officers in my study felt strongly that they needed to signal it, but it meant something quite different depending on where you sat in the organisation. For workers, a competent compliance officer was someone who would listen to any concern and bring it faithfully to management. For boards and senior leaders, competence meant filtering out noise and resolving serious issues efficiently. Then there was the tension around benevolence: compliance officers wanted to signal that they could handle sensitive matters and protect workers who spoke up. But for some middle managers, that very care implied partiality, as if being too supportive of whistleblowers meant taking sides, which in turn made the compliance officer less trustworthy in their eyes.

 

Building a firm’s trustworthiness, then, is not about the goodwill of top management or how well-intentioned they are. It is about their ability to identify the contradictions embedded in stakeholder expectations and to see how people at various levels of the organisation are sending self-defeating signals, not out of bad faith but precisely because they are trying to do the right thing for everyone at once.

 

Strengthening an organisation’s capacity for trustworthiness means mapping those signals across the whole organisation, in order to build greater convergence in how stakeholders perceive it. It is not just about delivering on your promises; it is about only promising what you can actually deliver. And while trustworthiness is built by meeting stakeholder expectations, it is equally built by shaping those expectations to reflect what you are genuinely able to do. 

 

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Wim Vandekerckove is Professor of Business Ethics at EDHEC Business School

 

Main image courtesy of iStockPhoto.com and Tippapatt