Trust In The Boardroom

• Published date: 26 September 2022
• Subject Matter: Corporate/Commercial Law, Corporate and Company Law, Shareholders
• Law Firm: Deloitte
• Author: Mr Michael Bondar, Don Fancher and William Touche

Why Trust belongs on every board's agenda

Trust is a company's most valuable asset. It resides in the value proposition, in leadership, amongst the workforce, in the minds of customers, suppliers, the community, and other stakeholders - and is reflected in the value of the company and in shareholder behavior. But few boards look at Trust in a methodical manner.

Why Trust matters now

While Trust isn't new, much of today's world is perceived as less trustworthy than before, making it a rare and precious commodity. A recent survey on Trust in business found that sixty percent of US adults have little or no confidence in business leaders to act in the best interests of the public.¹ It is a constant battle, but establishing Trust has become even more challenging because of the public's higher expectations of business responsibilities, heightened by the challenges of the COVID pandemic, and the increasing willingness by campaigners to leverage the speed and publicity of the media.

However, the benefits of being trusted are huge: trustworthy companies outperform others by up to four times.² Eighty-eight percent of customers say they'd buy again from a brand they trust,³ and 95 percent of executives at companies with high levels of consumer trust believe their companies are more resilient.⁴

At Deloitte, we define Trust as "the foundation of a meaningful relationship between an entity and its stakeholders at the levels of the individual and the organization". A company builds Trust by being competent and having good intent, demonstrating that it is capable, reliable, transparent, and humane.

Trust gives companies resilience - much needed in today's world. When something goes wrong - and we all know that in business, something is usually going wrong somewhere - a full repository of Trust can carry an organization through the rough patch and help it recover more quickly - for instance, consumers will give it the benefit of the doubt over supply chain problems. Conversely, anything that damages a company's Trust will likely ultimately hurt the bottom line.

Like other important business assets, Trust should be quantified, measured, managed, and reported. Trust could be viewed like a bank account - the organization wants more deposits than withdrawals. It deserves as much attention from boards as other vital issues such as cybersecurity, financial planning, and resourcing.

Deloitte's recent research on customers in the technology sector revealed that B2B purchasers and...