Business Ethics Certification: The Transparency Is The Key To Get Your Stakeholder Trust

There has never been a more critical time in our history to be concerned about the trust stakeholders place in institutions. As has been stated by Tim Hartford, “Trust enables people to do business with one another. Doing business is what creates wealth.”

Yet, each day, we hear more stories of trusted executives who betray stakeholder trust. Despite the best intentions of some organizational leaders, public exposure and scrutiny of corporate greed and fraud are so prevalent that stakeholder skepticism is commonplace. In fact, the potential for perceived breaches of trust also presents a risk to corporate leaders. So, what is to be done? What can executives do to right the ship – to exude values that establish, maintain, and maximize stakeholder trust?

In a recent qualitative study of three U.S. institutions, including a Fortune 500 corporation, a government entity, and a nonprofit organization, the author found that there are seven critical elements of a comprehensive trust repair agenda. The first, and most important finding is that when trust has been violated, stakeholders are motivated to understand why the violation occurred.

Findings show that stakeholders first want to understand the circumstances surrounding the violation. Managers and executives should provide an open account of key features of the transgression. Explanations which are authentic, reasoned, open and relevant to the transgression in question enhance fairness judgments, and can increase trustworthiness perceptions. Our findings have been supported by scholars (see Barclay 2008; Greenberg, 1993), and practitioners.

The provision of information is one of the most important elements of a trust repair agenda. However, transparency in information is insufficient. A comprehensive trust repair agenda requires more… organizational leaders should provide as much information as possible without causing harm to their organization.

Practitioners are recommended to ensure their post-transgression communication plan includes: a) a forthright and complete explanation of the organizational failure, including who and what is responsible; b) a comprehensive, reasoned plan going forward, including safeguards against repeating the transgression; and c) honesty and transparency. Practitioners should be mindful that their integrity and competence is being measured by stakeholders at all times.

Organizational executives without the respect of their stakeholders, particularly due to lack of integrity, will have a difficult time restoring trust. Managers are advised to have many reparative conversations during a time of crisis, while providing real evidence of promised change.

About the author:

Rachel Y. Daniel is the CEO of Synergy Marketing Strategy & Research, Inc. Synergy has been designing strategies that build trusted brands for over seven years. Working with Fortune 500 companies, government entities, universities, and mid-sized businesses, Synergy utilizes sound marketing strategy, rigorous marketing research, and excellent customer and stakeholder relationships. For your marketing and branding needs, please visit this site or this site

Rachel completes her doctorate at Case Western Reserve University’s Weatherhead School of Management in May 2010.

Her research interests include brand and organizational trust, and the impact of justice and fairness perceptions on trust.

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Tags: ethics, trust, conduct, behaviour, moral