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Trust and Trust Repair Alive and Well

Wed, April 10, 2013 4:49 PM | Deleted user

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I have not written a blog in a few weeks as I have been busy finishing a book chapter on trust in banks. As part of that research, I read all 200 plus pages of the Salz Review that was published by Barclays in early April 2013. Salz was hired by Barclays to investigate and report on the firm’s trust violations and they had full independence in conducting this review. The investigation included over 600 interviews and was global in scope. What’s more, Barclays published the entire “warts and all” review. Contrast this with the Goldman Sachs review of business conduct. The Goldman review committee included no fully independent outsiders, and the report that was published only included recommendations for reform and nothing in the way of transparent disclosure of what really happened that violated stakeholder trust. Ironically, one of the recommendations of the Goldman review was to be more transparent. By making the Salz report public, Barclays has far exceeded Goldman in both calling for transparency and actually living it.

 

Why is transparency so important to trust repair? After taking a beating from the media who pick through the report and highlights the most egregious violations, transparency does some really important things for Barclays longer term. First, it avoids the self-surgery biases that can lead to a failure to really understand the root causes of trust violations. It is not at all clear that Goldman has really gotten to the heart of what went wrong at that once great firm. Second, transparency signals to trustors that the firm really understands that it did something wrong and respects those whose trust was violated enough to allow them to see the guts of the repair process. Third, the act of disclosing great detail about violations, and deliberately making themselves vulnerable, is an act of trustworthiness itself. This suggests that they are genuine about repairing trust rather than merely treating the investigation as a PR ploy in the damage control process. Transparency and vulnerability are an act of penance paying that shows, beyond cheap talk, that the firm truly acknowledges and feels badly about the harm it has caused.

 

Having studied a number of trust repair processes, I have seen time and time again that half-hearted, self-interested and opaque investigations merely white wash what happened and do little to set the stage for real reform and re-building of trust. The Salz report’s major finding was that Barclays had failed to embed elements of trustworthiness deeply into its organization. For example, each subsidiary had its own culture and the HR and compliance functions lacked adequate power and influence. The bank has made a good first step in trust repair with the Salz Report. Let’s hope they continue down the slow and steady path of building trustworthiness deeply into the mission, strategy, leadership, culture, incentives and core operational processes of the company. Wouldn’t it be great if we had a bank that was the paragon of trust? I know where I’d put my money!

 

 


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