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Why business should stop trying to win back trust

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Why business should stop trying to win back trust

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Why business should stop trying to win back trust

After scandals did away with public faith, the answer lies in honesty and competence

The Volkswagen diesel emissions scandal is one of many that make ‘trust’ events more urgent © EPA

Despite the early morning start, every seat in the Financial Times conference room was taken. “How to win back trust in business” is a subject that has them packing the hall.

It was the latest of several “trust” events I have chaired since the 2008 banking crisis. There have been other scandals since then, such as bribery in the pharmaceutical industry and Volkswagen’s diesel emissions cheating, that have made “trust” events even more urgent.

But at this one, a senior figure from the banking world said “enough”. Enough of talking about trust.

She did not mean it in the way that Bob Diamond, then Barclays’ chief executive, did, when he said in 2011 that the time for “remorse and apology” was over, that people should stop blaming the banking industry and move on.

Indeed, Alison Cottrell, a former UK Treasury official, is chief executive of the Banking Standards Board, a private sector body set up in 2015 to improve banks’ behaviour. She would be the last to insist that we need simply to get over the financial crisis.

What she meant by saying we should stop focusing on trust was that trust in business was unhealthy if it was misplaced — if people trusted banks and companies that were misbehaving, as they did in the past. What we should be aiming at, Ms Cottrell said, was not trust but trustworthiness.

Rather than fretting about how to get people to trust them, banks and business generally should try to be honest, reliable and competent.

A society in which banks and companies behaved properly but were mistrusted was healthier than one in which people trusted institutions that were corrupt or badly run.

It was a refreshing take: the problem is not lack of trust today but excessive trust in the past — and that applies to many institutions, not just business.

There was an innocent time when people assumed not just that banks would give them honest mortgage advice, but that priests and boarding schoolteachers could be trusted to look after young people, until revelations of decades-ago child abuse tore that apart.

Many thought UK building standards and fire protection regulations were world class. We do not know the full causes of the devastating Grenfell Tower inferno, but no one is boasting about the reliability of British fire regulation now.

No one ever suspected British tabloid newspapers of being scrupulous truth-tellers. But the extent of their phone hacking still came as a shock.

That people are no longer as trusting as they were is positive. An alert, questioning society is preferable to one that believes what it is told, or thinks that those at the top know best.

The problem is that we have gone further than intelligent scepticism. Many now disbelieve everything they are told, or pass on conspiracy theories. There are some who believe the authorities have covered up the true number of fatalities at Grenfell Tower.

The prevalence of social media makes the spreading of disbelief easier. People are more likely to believe their friends, family and social media contacts than anyone in authority.

There is little that companies can do about that. Honest businesses need to carry on being honest. Dishonest companies need to change their ways. Those that refuse to do so need to be more strictly regulated. Financial services and the construction industry have lost the right to police themselves.

Business should forget about winning back trust. It is unlikely to happen and it is a misdirected effort. They should concentrate on producing managers who set an example of decent behaviour for their staff. They should ensure that whistleblowers have a way to bring malpractice to attention and that they are not harassed and persecuted, as frequently happens.

An absence of scandal and grudging respect are the most that companies can expect now. With years of decent behaviour, customer loyalty and affection could even follow. But unquestioning trust will probably never come back. That is no bad thing.

And the next time I receive an invitation to chair an event on “how business can win back trust”, I will suggest we change the title to “how to run a trustworthy business”.
Twitter: @Skapinker

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