x Abu Dhabi, UAESunday 23 July 2017

Belief in leaders all comes down to trust

The Life: While trust in business has rebounded, senior executives are still perceived as being self-interested, says management guru Sim Sitkin.

Sam Sitkin, professor of management at the Center of Leadership and Ethics at Duke's Fuqua School of Business. (ANTONIE ROBERTSON / The National)
Sam Sitkin, professor of management at the Center of Leadership and Ethics at Duke's Fuqua School of Business. (ANTONIE ROBERTSON / The National)

Sim Sitkin is professor of management at the Centre of Leadership and Ethics at Duke's Fuqua School of Business. Here, he discusses trust, or lack thereof, in businesses.

Am I correct in thinking there has been an erosion of people's trust in business?

In recent years, businesses have really gone down in trust - not quite as low as many governments - but trust has gone down quite a bit. In recent studies, trust in business has rebounded, but trust in business leaders has not. Trust in senior executives has stayed down because people perceive self-interest and what appears to be greed as being a reflection of a lack of understanding about the situation [most people] are in and a lack of concern about [their] welfare. Leaders seem to have been acting for their own benefit and not only with a lack of concern for the general public and society, but even a lack of concern for their own institutions. The public has been concluding most recently that it's not the institution per se that is the problem, but it's the leaders of the institutions that are the problem.

Can't we just put more rules in place to reduce risk?

If you embed all of your trust in regulations, you actually never have to develop trust in the individual. The solution to a lack of trust is not a misplaced emphasis on regulation. Some regulations are actually helpful, some controls are helpful in building interpersonal as well as institutional trust, but some undermine it. If every time you do something that can be construed as trustworthy, it can be traced back to a rule or regulation; how can I know it had anything to do with you? What you really want people to do in building institutional trust is put in place regulations and controls around the things that are unimportant and allow flexibility around the things that should be important because then you can actually judge the actor.

So how can businesses build or rebuild trust?

The person whose trust you want to evoke needs to believe you actually understand them and care about them and will treat them fairly. So often, people have a misconception that trust is based on perceived competence. That's certainly relevant, but many times when there are problems related to trust the response on the part of businesses is to try to reassure people that they really know what they are doing. That is important, but it's not at all enough and sometimes it's even irrelevant. If I think you have the wrong values or malevolent intentions then why would I want you to be more competent? What's required for trust is not so much that I fully understand you from the outset, but that I sincerely wish to understand you and that I am willing to work at it.

The UAE ranks quite high for trust in business. Why is that?

I suspect it's because leadership has demonstrated more of a general concern for society and less of a concern for their own personal welfare and demonstrated more of a willingness to sacrifice for the greater good. That buffers you from the more general trend of decreased trust.

lgutcher@thenational.ae