Trusted corporations: the oxymoron that need not be

The seemingly continuous tranches of ethical and business governance mis-steps in the US, Europe and Australia – at least the ones that were caught in the glaring intensity of public spotlights – have us once again soberly contemplating the decline of societal trust in business leadership.

I am one of those caught in the wholesale decline of corporate trust. My barbecue conversations are liberally marinated with the cynicism of my non-corporate friends and family, and the taste is a bit rich for my liking. Beer in hand I protest, because the majority of senior executives, CEOs and Directors I have worked with and for are not morally bankrupt. And I am fairly sure that I am an ethical sort.  Still, even I can see how it may be tempting for the public to re-brand every corporate leader as either a manicured criminal or holistically incompetent until proven otherwise.

That is a problem. Not just because it tarnishes the personal brands of corporate leaders. It also affects how customers, investors, employees, governments view an organisation. Given enough mis-steps across enough industry sectors, this will, over time, cement how people view organisations in general. You don’t have to ponder that slippery slope too much to see that stocks of trust, once depleted, probably encourage less passive stakeholder responses levelled at organisations rather than individual leaders. And by “less passive”, I mean somewhat intrusive.

If we head down this rabbit hole, externally-imposed interventions on businesses become more popular in theory, and then more common in practice. Businesses may fight back, pointing to the increased costs of meeting more regulations, more standards. Which is a correct observation, even if it does unfortunately come across as badly-camouflaged blackmail in the media. In this tussle, it appears no-one wins. Businesses are more stringently controlled, the cost of doing business increases and consumers pay for the more complex externally-imposed governance. Business leaders of the future will have a tougher gig than business leaders of the past because that is not a sustainable corporate model.

What should today’s corporate leadership look and feel like, if we are to avoid this dissatisfying future? What might we ask for, that is not currently being seen consistently enough? I generally ask for just four simple things that I believe radically change the culture.

Firstly, attention to the external environment heightens awareness. Direct a better attuned radar to external ripples and grievances. Focus a more authentic curiosity and wisdom about why they matter now, and why they might matter later. Earlier attention today makes for a smaller internal problem tomorrow.

Secondly, being cynically alert to what's happening inside the organisation keeps us on guard. Is the state of play really as sweet as it is being presented by middle and senior management? Is there positive proof of it? Show me, don't just tell me. Turning off the headphones on self-reinforcing PR messages and looking hard in the mirror can help avoid some of the loss of objectivity.

Thirdly, if there is a problem – small or large - take a courageous look to the source. What leadership signals, or omitted signals, allowed the problem to present in the first place? Is there zero tolerance, implied marginal tolerance or a sub-culture of laissez-faire subliminally transmitted within the organisation? Fix both the problem and the leadership attributes, or expect recurrence.

Fourth, deploy sufficient internal governance capacity – the necessary skills, resources and time – with an unambiguous mission to control problem areas. In a realm of competing demands, it is easy – and less internally turbulent - to undercook solutions, put in place band-aids and solve for the things that are not the real causes.  Round out the culture of attention with a culture of commitment.

Frequently these four things are done badly. There is waiting until the threat is big enough to be threatening. There is time spent in denial, clinging to the “truth” of PR.  Then, consequently, time is short and fires are fought rather than fire breaks built. And because none of the preceding exhibits a strategic mindset, solutions can be short-term tactical. Corporate cynics may argue that this badly-done paradigm is a “practical” way to work. I argue back that the word “underwhelming” seems more fitting.

There is no such thing as zero risk in a dynamic business world, and – because we are only human – possibly even no such thing as perfect governance in the intense busyness of the business environment. But there is aspiration, committed business leadership and collective organisational effort. When these are authentic and the detail transparent, it eventually shows – even through the grime of accumulated historical cynicism. And those attributes can help quell the ebbing tide of public trust.