Remember me
Forgot password
Home
About
Events
Trust Summit
2012
Speakers
Agenda
Hosts & Sponsors
Press Releases
Map & Directions
2013
Agenda
Speakers
Accommodations
2015
Agenda
Speakers
Host & Sponsors
Accommodations
Executive Education
Oct. 22 - 24, 2013
Schedule
Faculty
Media Center
In the Media
Latest News
Videos
Summit 2013 Videos
Blog
Resources
Trust Survey
Trust Digest
2016 Trust Digest Archives
2016 December Trust Digest Archives
Trust Digest 170 (December 19, 2016)
Trust Digest 169 (December 12, 2016)
Trust Digest 168 (December 6, 2016)
2016 November Trust Digest Archives
Trust Digest 167 (November 28, 2016)
Trust Digest 166 (November 21, 2016)
Trust Digest 165 (November 14, 2016)
Trust Digest 164 (November 7, 2016)
2016 October Trust Digest Archives
Trust Digest 163 (October 31, 2016)
Trust Digest 162 (October 24, 2016)
Trust Digest 161 (October 17, 2016)
Trust Digest 160 (October 11, 2016)
Trust Digest 159 (October 6, 2016)
2016 September Trust Digest Archives
Trust Digest 158 (September 26, 2016)
Trust Digest 157 (September 19, 2016)
Trust Digest 156 (September 13, 2016)
Trust Digest 155 (September 6, 2016)
2016 August Trust Digest Archives
Trust Digest 154 (August 29, 2016)
Trust Digest 153 (August 22, 2016)
Trust Digest 152 (August 15, 2016)
Trust Digest 151 (August 8, 2016)
Trust Digest 150 (August 1, 2016)
2016 July Trust Digest Archives
Trust Digest 149 (July 25, 2016)
Trust Digest 148 (July 18, 2016)
Trust Digest 147 (July 11, 2016)
Trust Digest 146 (July 5, 2016)
2016 June Trust Digest Archives
Trust Digest 145 (June 27, 2016)
Trust Digest 144 (June 20, 2016)
Trust Digest 143 (June 13, 2016)
Trust Digest 142 (June 6, 2016)
2016 May Trust Digest Archives
Trust Digest 141 (May 31, 2016)
Trust Digest 140 (May 23, 2016)
Trust Digest 139 (May 16, 2016)
Trust Digest 138 (May 4, 2016)
2016 April Trust Digest Archives
Trust Digest 137 (April 25, 2016)
Trust Digest 136 (April 19, 2016)
Trust Digest 135 (April 13, 2016)
Trust Digest 134 (April 5, 2016)
2016 March Trust Digest Archives
Trust Digest 133 (March 30, 2016)
Trust Digest 132 (March 23, 2016)
Trust Digest 131 (March 14, 2016)
2016 February Trust Digest
Trust Digest 129 (February 29, 2016)
Trust Digest 128 (February 22, 2016)
Trust Digest 127 (February 15, 2016)
Trust Digest 126 (February 8, 2016)
2016 January Trust Digests Archives
Trust Digest 125 (January 27, 2016)
Trust Digest 124 (January 19, 2016)
Trust Digest 123 (January 12, 2016)
Trust Digest 122 (January 5, 2016)
2015 Trust Digest Archives
2015 December Trust Digest Archives
Trust Digest 121 (December 22, 2015)
Trust Digest 120 (December 8, 2015)
Trust Digest 119 (December 1, 2015)
2015 November Trust Digest Archives
Trust Digest 118 (November 24, 2015)
Trust Digest 117 (November 17, 2015)
Trust Digest 116b (November 11, 2015)
2015 October Trust Digest Archives
Trust Digest 115 (October 26, 2015)
Trust Digest 114b (October 19, 2015)
Trust Digest 114a (October 12, 2015)
Trust Digest 113 (October 5, 2015)
2015 September Trust Digest Archives
Trust Digest 112 (September 23, 2015)
Trust Digest 111 (September 10, 2015)
Trust Digest 110 (September 3, 2015)
2015 August Trust Digest Archives
Trust Digest 109 (August 27, 2015)
Trust Digest 108 (August 18, 2015)
Trust Digest 107 (August 10, 2015)
Trust Digest 106 (August 3, 2015)
2015 July Trust Digest Archives
Trust Digest 105 (July 20, 2015)
Trust Digest 104 (July 13, 2015)
Trust Digest 103 (July 7, 2015)
2015 June Trust Digest Archives
Trust Digest 102 (June 29, 2015)
Trust Digest 101 (June 22, 2015)
Trust Digest 100 (June 15, 2015)
Trust Digest 99 (June 8, 2015)
Trust Digest 98 (June 1, 2015)
2015 May Trust Digest Archives
Trust Digest 97b (May 25, 2015)
Trust Digest 97a (May 18, 2015)
Trust Digest 96 (May 11, 2015)
Trust Digest 95 (May 5, 2015)
2015 April Trust Digest Archives
Trust Digest 94 (April 27, 2015)
Trust Digest 93 (April 20, 2015)
Trust Digest 91 (April 6, 2015)
2015 March Trust Digest Archives
Trust Digest 90 (March 31, 2015)
Trust Digest 89 (March 24, 2015)
Trust Digest 88 (March 16, 2015)
Trust Digest 87 (March 9, 2015)
Trust Digest 86 (March 3, 2015)
2015 February Trust Digest Archives
Trust Digest 85 (February 23, 2015)
Trust Digest 84 (February 17, 2015)
Trust Digest 83 (February 9, 2015)
Trust Digest 82 (February 2, 2015)
2015 January Trust Digest Archives
Trust Digest 81 (January 26, 2015)
Trust Digest 80 (January 19, 2015)
Trust Digest 79 (January 15, 2015)
Trust Digest 78 (January 7, 2015)
2014 Trust Digest Archives
2014 December Trust Digest Archives
Trust Digest 77 (December 16, 2014)
Trust Digest 76 (December 9, 2014)
Trust Digest 75 (December 2, 2014)
2014 November Trust Digest Archives
Trust Digest 74 (November 25, 2014)
Trust Digest 73 (November 20, 2014)
Trust Digest 71 (November 4, 2014)
2014 October Trust Digest Archives
Trust Digest 70 (October 28, 2014)
Trust Digest 69 (October 21, 2014)
Trust Digest 68 (October 16, 2014)
Trust Digest 67 (October 10, 2014)
2014 September Trust Digest Archives
Trust Digest 66 (September 30, 2014)
Trust Digest 65 (September 23, 2014)
Trust Digest 64 (September 16, 2014)
Trust Digest 63 (September 9, 2014)
Trust Digest 62 (September 5, 2014)
2014 August Trust Digest Archives
Trust Digest 61 (August 22, 2014)
Trust Digest 60 (August 12, 2014)
Trust Digest 59 (August 5, 2014)
2014 July Trust Digest Archives
Trust Digest 58 (July 22, 2014)
Trust Digest 57 (July 17, 2014)
Trust Digest 56 (July 9, 2014)
2014 June Trust Digest Archives
Trust Digest 54 (June 24, 2014)
Trust Digest 53 (June 17, 2014)
Trust Digest 52 (June 10, 2014)
Trust Digest 51 (June 3, 2014)
2014 May Trust Digest Archives
Trust Digest 50 (May 20, 2014)
Trust Digest 49 (May 14, 2014)
Trust Digest 48 (May 6, 2014)
2014 April Trust Digest Archives
Trust Digest 47 (April 22, 2014)
Trust Digest 46 (April 14, 2014)
Trust Digest 45 (April 1, 2014)
2014 March Trust Digest Archives
Trust Digest 44 (March 25, 2014)
Trust Digest 43 (March 18, 2014)
Trust Digest 42 (March 11, 2014)
Trust Digest 41 (March 4, 2014)
2014 February Trust Digest Archives
Trust Digest 39 (February 17, 2014)
Trust Digest 38 (February 10, 2014)
2014 January Trust Digest Archives
Trust Digest 36 (January 21, 2014)
Trust Digest 34 (January 6, 2014)
2013 Trust Digest Archives
2013 December Trust Digest Archives
Trust Digest 33 (December 18, 2013)
Trust Digest 32 (December 11, 2013)
Trust Digest 31 (December 3, 2013)
2013 November Trust Digest Archives
Trust Digest 30 (November 26, 2013)
Trust Digest 29 (November 19, 2013)
Trust Digest 28 (November 11, 2013)
Trust Digest 27 (November 5, 2013)
2013 October Trust Digest Archives
Trust Digest 26 (October 28, 2013)
Trust Digest 25 (October 21, 2013)
Trust Digest 24 (October 15, 2013)
Trust Digest 23 (October 7, 2013)
Trust Digest 22 (October 1, 2013)
2013 September Trust Digest Archives
Trust Digest 21 (September 23, 2013)
Trust Digest 20 (September 16, 2013)
Trust Digest 19 (September 11, 2013)
Trust Digest 18 (September 6, 2013)
2013 August Trust Digest Archives
Trust Digest 17 (August 17, 2013)
Trust Digest 16 (August 10, 2013)
Trust Digest 15 (August 3, 2013)
2013 July Trust Digest Archives
Trust Digest 14 (July 27, 2013)
Trust Digest 13 (July 20, 2013)
Trust Digest 12 (July 13, 2013)
Trust Digest 11 (July 6, 2013)
2013 June Trust Digest Archives
Trust Digest 10 (June 29, 2013)
Trust Digest 9 (June 22, 2013)
Trust Digest 8 (June 15, 2013)
Trust Digest 7 (June 8, 2013)
Trust Digest 6 (June 1, 2013)
2013 May Trust Digest Archives
Trust Digest 5 (May 25, 2013)
Trust Digest 4 (May 18, 2013)
Trust Digest 3 (May 11, 2013)
Trust Digest 2 (May 4, 2013)
2013 April Trust Digest Archives
Trust Digest April 27, 2013
Trust Digest April 20, 2013
Trust Digest April 6, 2013
2013 March Trust Digest Archives
Trust Digest March 30, 2013
Trust Digest March 23, 2013
Trust Digest March 16, 2013
Trust Digest March 9, 2013
2013 February Trust Digest Archives
Trust Digest February 23, 2013
Trust Digest February 16, 2013
Trust Digest February 9, 2013
Trust Digest February 2, 2013
2013 January Trust Digest Archives
Trust Digest January 26, 2013
Trust Digest January 20, 2013
Trust Digest January 13, 2013
Trust Digest January 7, 2013
Trust Digest January 2, 2013
2012 Trust Digest Archives
2012 December Trust Digest Archives
Trust Digest December 10, 2012
Trust Digest December 3, 2012
2012 November Trust Digest Archives
Trust Digest November 24, 2012
Publications
Trust Case Studies
Videos
Presentations
Staff
Become a Member
Contact Us
Home
Blog
Privately Held Companies Are More Trustworthy
Back to list
Privately Held Companies Are More Trustworthy
Sat, January 19, 2013 1:30 PM
|
Deleted user
Andy Serwer, the Managing Editor of Fortune Magazine, was on Morning Joe on January 17, 2013 promoting the new 100 Best Companies to Work For issue. This list is created in large part by an employee trust survey. Serwer was asked why so many of the companies listed are privately held. Do they have an advantage? The answer is yes they do. Privately held companies are inherently more trustworthy for one major reason: they are under less pressure by investors to manage the business for each quarter so they take a longer-term view.
What makes a company that takes a longer time horizon in decision-making more trustworthy? Trust is much more likely where there is an alignment of interests and incentives. When we take the longer-term view, there tends to be more alignment among stakeholders. This is the trust inducing rationale for bonus claw back provisions - create a disincentive for an executive seeking short-term benefit by creating a longer-term problem that someone else will have to solve. During the global financial crisis we learned of the expression “IBGYBG” in some emails at the ratings agencies. IBGYBG stands for “I’ll be gone, you’ll be gone” meaning lets do the deal, get the credit and let the next poor sucker sort out the disaster later. Game theory research in economics and prisoners dilemma research in psychology, confirms that people are more opportunistic and less cooperative when exchanges are framed as one-shot versus longer term relations..
As an example, consider the possible conflict of Private Equity (PE) firms which tend not to hold a position for more than 5 or 6 years. The PE firm tells the hired gun management team that, if they improve the valuation of the company in 5 years, they will get a very large bonus. Will these executives have any incentive to invest in something that will put the five-year valuation at risk but may position the company well 10 or 20 years from now? Of course not. from a trust perspective, incentives and market forces that encourage managing for the next quarter, or for the next 5 years, lead to conflicts of interests with stakeholders in the ecosystem of the firm that have longer term interests (e.g., employees, suppliers, communities). This is why privately held companies like SAS and Quiktrip, which are listed on the 100 Best Companies to Work For, do not want to go public. They believe that the short-term opportunism demanded by the stock market will destroy the high trust cultures that they have so carefully nurtured.
These high trust privately held firms have a long-term philosophy that guides them and benefits all stakeholders. This seems to have been lost in many public companies. The idea of sustainably leading for the long term goes back a long way. In the Iroquois nation constitution leaders were instructed as follows: “… in all your official acts, self interest shall be cast into oblivion….. return to the way of the Great Law which is just and right. Look and listen for the welfare of the whole people and have always in view not only the present but also the coming generations.” This is the origin of the sustainability expression “Seventh Generation.” Few CEOs will have the luxury of following the Iroquois way when the average investor holds a stock for about 7 months (used to be about 7 years). Until we find a way to get back to more patient, longer-term philosophy, the 100 Best Companies to Work For are more likely to be some very cool privately held companies.
Add comment
Follow us at
©
Consortium for Trustworthy Organizations 2013
| 33 West 60th Street 4th Floor | New York, NY 10023
Powered by
Wild Apricot
. Try our all-in-one platform for easy membership management
Try it FREE