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Six ways boards can take the lead in an era of mistrust
Board members have a central role to play in helping organizations steer a safe path in a polarized and skeptical world.
The double shock of the COVID-19 pandemic and Russia’s invasion of Ukraine, followed by a seemingly fundamental geopolitical realignment, has coincided with an unprecedented crisis of public trust. People fear for their livelihoods, worry about new technologies, and suspect their leaders – in government, media, and business – are lying to them. They believe “the system” is fundamentally broken.
Societies have become polarized and mistrustful. Think of the heated debates over vaccines and climate change. Public expectations are often conflicted and poorly informed. For instance, some assume that a major problem like decarbonization can be instantly solved, while others dispute whether any action is needed.
Disinformation campaigns aimed directly at companies cloud the public discourse. Even routine business decisions – such as choosing a supplier or drafting a corporate training program – are often judged through a politicized lens.
Alarmingly, 40% of people now approve of “hostile activism” – from attacking individuals online to damaging public or private property, according to the Edelman Trust Barometer. Among 18 to 34-year-olds, this rises to 53%. Perhaps unsurprisingly, 94% of executives in a PwC survey said they faced at least one challenge in building trust with stakeholders, and a similar number agreed that building and maintaining trust improved the bottom line.
There is a silver lining: unlike most institutions, businesses are still perceived as trustworthy overall, especially by their employees. This is both an opportunity and an obligation. Business leaders must step up and lead, and corporate boards have a key role to play. They can provide a much-needed long-term perspective to guide corporate strategy and serve as an early warning system for management, thanks to their broad industry insights and regular contact with different stakeholders and shareholders.
Six dimensions of trust that boards must address
As management teams navigate this global crisis of trust, corporate boards can help by focusing on six dimensions of re-establishing trust.
1. Shape purpose and values
A company is trusted if it consistently does what it promises – if it delivers on its purpose and core values reliably, transparently, authentically, and ethically. Corporate boards must act as guardians of purpose and values, helping to define them and ensuring that business strategies and decisions align. The authority and credibility of a board can also underpin a company’s communication, which must demonstrate how these values benefit stakeholders and society. We have all witnessed instances where companies seemingly made a 180-degree turn on their stated values. However, values must be neither flavor-of-the-day decisions nor marketing slogans. It is the duty of boards to ensure that values and business purpose are truly aligned.
“Values must be neither flavor-of-the-day decisions nor marketing slogans. It is the duty of boards to ensure that values and business purpose are truly aligned ”
2. Enhance transparency and accountability
Trust is rooted in truth, so boards must champion the clear and consistent disclosure of company activities. Rigorous oversight prevents misconduct through negligence, poor processes, or malpractice. Boards should insist on independent reviews to validate claims and data and loop in external stakeholders as they establish transparency and accountability. This is especially important for contentious topics, such as sustainability and innovation. A lack of transparency and the fear of the unknown feeds distrust, particularly with emerging technologies like generative artificial intelligence, which is being deployed in everyday business processes at a speed never seen before. I’m reminded of the IBM training manual from the 1970s, which stated: “A computer can never be held accountable. Therefore, a computer must never make a management decision.” It was true then and remains true today. AI lacks both empathy and gut feelings. If businesses fail to communicate clearly how they plan to use AI, then they will stoke suspicion and erode trust, which in turn prevents society from realizing the full benefit of one of the most impactful innovations in history.
3. Strengthen stakeholder engagement
Stakeholder engagement is vital in building trust. Boards should push for (and lead) an open dialogue with all stakeholders – from shareholders to customers, partners to employees and community leaders. They should ensure that the management maintains robust feedback channels. Engagement starts with shareholders but must extend to employees, outside experts, and the broader community. This wins trust advocates for a company and helps gain a balanced picture to support better decision-making.
4. Promote fact-based decision-making
Boards aren’t just corporate fact checkers (although it’s part of the job), but they must make sure that business decisions and innovations are supported by data and clearly articulated information that is credible with target audiences – from regulators to partners and end customers. By proactively sharing evidence and expertise, boards can also help to “pre-bunk” harmful disinformation campaigns.
5. Serve as sounding boards on public issues
Among the most important roles of a corporate board is to act as a sounding board for management initiatives. Any executive or project team can fall victim to groupthink. Boards can protect and build trust by assessing the potential political and social ramifications of major corporate moves, anticipating and managing stakeholder concerns before they escalate, and offering strategic direction to navigate complex, polarized environments.
6. Guide ethical leadership and culture
Corporate values must not rest on tactical decisions. They have to be a company’s North Star, rooted in its purpose and anchored by fundamental principles. They are the cultural glue that holds a business together. Boards can help companies by ensuring the business is led by executives who champion ethical behavior, that it supports a culture of integrity, openness and respect, and that it has metrics in place that measure and reward ethical conduct. This is about much more than compliance. Ethical, authentic, and transparent leadership is essential for a business to build long-term trust and protect its reputation.
Boards must build bridges
I have little doubt that our world will be stuck in a crisis of trust for years. That’s why corporate boards have a strategic responsibility to help navigate this era, minimize and mitigate risk, and rebuild trust where it has been lost. To succeed, boards must focus on long-term, sustainable strategies that benefit shareholders and society. They must anticipate and prevent any future crisis by framing robust ethical frameworks. Finally, boards should use their credibility and influence to bridge divides, uphold facts, and restore public confidence.
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