Developing Trust with Stakeholders

Trust is the glue that holds relationships together. A business’ relationships with its stakeholders, such as investors, customers, communities and society are crucial to its success, sometimes even its survival. Trust is built over a period of time, and if sustained, can lead to strong relationships.  If violated, however, the relationship can be destroyed immediately, and perhaps fatally. These are challenging times for trust, where social media has led to mis-information and outright lies masquerading as truth. More and more, truth stays elusive, and trust suffers as a result.

Trust in investor relations has long been viewed as so important to the sustainability of the financial markets that a complex system of auditors and regulators and oversight bodies has developed in order to preserve truth and maintain trust. However, the roles of these participants is constantly being redefined. The role of the auditors in particular, has been under fire in recent years, as they experience great difficult in meeting the perceived needs of their large and complex clients. Some experts feel that their role in the modern world cannot meet these needs because their client companies have become too large and complex to be audited. 

These difficulties point to the basic fact that trust and communication of truth must begin with the company itself; with management and its directors. This is shown in the recent decision regarding auditor/director responsibility in the UK. Without this, all the other safeguards cannot do the job. That means the company must develop a culture of truth throughout the company.

Trust with other stakeholders – customers, communities and others – is equally important. Customers are known to stop buying a company’s product when they find that they cannot trust its quality or integrity.  

Deloitte has released an excellent document outlining the approach a company can take in establishing trust with employees, customers and investors. It can be found on their website.

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