Leadership as Trusteeship

Trust is an essential human attribute and virtue. When we are born, we are completely helpless and at the mercy of others. We instinctively trust that someone will look after us, nurture us, protect us. Being trusting and being trustworthy are central tenets of what it means to be a human being.

Yet, there is a huge trust deficit in our society today. There is a crisis of trust in government, in religious institutions, in our educational system, in the health-care system and in the financial system. There is deep distrust within the public at large towards the corporate world in general and towards most companies and their leaders. Within companies, there is a great deal of mutual distrust among employees, and among employees and customers, suppliers and leaders.

Why should all of this matter? Trust is an essential element in building social capital, which Francis Fukuyama defined as the “shared norms or values that promote social cooperation, instantiated in actual social relationships.” Unlike other forms of capital, social capital is not depleted by being used; in fact, it is depleted if not used. Social capital is vital for the development of society as a whole as well as for organizations. A high trust organization is characterized by greater engagement and effectiveness on the part of its members. It exhibits greater synergy across the workforce, so that people collectively achieve far more than they could as individuals. An organizational environment that is lacking in trust leads to a defensive, suspicious, insular and fearful mindset. This depletes organizational energy and makes people incapable of true creativity. It imposes a burden of higher monitoring and legal costs. It makes companies sluggish, unresponsive and uncaring towards market needs. It sows the seeds of the eventual destruction of the organization.