The Trust Crisis
In the aftermath of the Royal Commissions into Misconduct in the Banking, Superannuation and Financial Services Industry and Aged Care Quality and Safety, TRUST has been placed firmly under the microscope.
Businesses need to remember that we exist to help customers not take advantage of them. In their article ‘The Trust Crisis’, authors Sandra J. Sucher & Shalene Gupta examine recent trust failures and give insights into how trust can be rebuilt.
What Stakeholders Want
Companies can’t build trust unless they understand the fundamental promises they make to stakeholders. Firms have three kinds of responsibilities: Economically, people count on them to provide value. Legally, people expect them to follow not just the letter of the law but also its spirit. Ethically, people want companies to pursue moral ends, through moral means, for moral motives.
What this looks like varies with each kind of stakeholder. To customers, for instance, economic value means creating products and services that enhance their lives; to employees, it means a livelihood; to investors, it means returns; and to society, it means both fulfilling important needs and providing growth and prosperity. Here’s the complete set of stakeholder expectations:
The Fundamental Promises of Business
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Of course, expectations can vary within a stakeholder group, leading to ambiguity about what companies need to live up to. Investors are a prime example. Some believe the only duty of a company is to maximize shareholder returns, while others think companies have an obligation to create positive societal effects by employing sound environmental, social, and governance practices.
Speak to us about how good governance and information sharing can help to rebuild trust and create mutual value.