Trust is crucial within boards, between leaders and 'followers' and between the company and its stakeholders. Loss of trust can be disastrous. It can cause severe reputational damage.
But too much of the wrong kind of trust - for example unquestioning trust - can be dangerous. Amongst other issues, it can cause complacency, ineffective NEDs, dazzled subordinates, groupthink and risk blindness. All are serious behavioural and organisational risks that have regularly led to disaster.
Leaders should aspire to trust of a mutual kind that will, for example, listen to and digest other perspectives and welcome perceptive questioning, constructive criticism and robust challenge - not to mention unwelcome news.
Anthony Fitzsimmons is Chairman of Reputability LLP and,
with the late Derek Atkins, author of “Rethinking Reputational Risk: How to Manage the Risks that can Ruin Your Business, Your Reputation and You”
- Reputability are thought leaders in the field of reputational risk and its root causes, behavioural risk and organisational risk. Our book 'Rethinking Reputational Risk' received excellent reviews: see www.rethinkingreputationalrisk.com. Anthony Fitzsimmons, one of its authors, is an authority and accomplished speaker on reputational risks and their drivers. Reputability helps business leaders to find these widespread but hidden risks that regularly cause reputational disasters. We also teach leaders and risk teams about these risks. Here are our thoughts, and the thoughts of our guest bloggers, on some recent stories which have captured our attention. We are always interested to know what you think too.