In my over 35 years as an executive, corporate director and entrepreneur, one force has made a difference more than any other: trust. I have consistently noticed the potent power of trust at the boardroom table and beyond. To help new and experienced board members dig deeper into this topic, I wrote this blog that shares practical insights on:
- What is trust?
- Why trust is important for boards
- My 6 Cs of trust
What is trust?
At its most basic level, trust is “the belief that someone or something is reliable, good, honest, and effective.” But what does that mean in practical terms? Essentially, trust is an understanding that you can rely on someone else to do what they say they’ll do and act with your best interests at heart.
Trust is a critical element of success, personally and professionally. As John Kador explains in Corporate Board Member magazine, “Questions of trust are central to literally every decision that human beings make, from buying a washing machine to selecting a marriage partner. Trust cannot be demanded; it must be earned. It cannot be requested; it must be demonstrated.”
The higher the trust, the better the results. For example, a McKinsey study of NCAA basketball players found the team that had the highest trust in its coach also had the highest number of wins, and the team that had the lowest trust in its coach had the lowest scores.
Understanding how trust works and how you can more effectively build trust may significantly improve your capacity for success. Stephen M. R. Covey, widely known as one of the world’s leading authorities on the topic, asserts that it is “the most overlooked, misunderstood, under utilized asset to enable performance.”
Why trust is important for boards
Some of the most pivotal decisions that happen in our world today occur around the boardroom. Because of this, it likely comes as no surprise that trust-building is a critical skill for every current and aspiring director. In a recent report, the Institute of Corporate Directors (ICD) describes trust as “connective tissue that runs through strategy, culture, risk and other aspects of governance.”
But what does trust look like at a board level? As this article from TrustRaising explains, an increased sense of trust improves the board’s understanding of its roles and responsibilities and its ability to work as a collaborative team toward shared goals. An environment of trust also prevents conflict and helps boards deal with common, pressing issues such as evaluations of senior leaders, self-evaluations of the board’s performance and responding to allegations of illegal or inappropriate behaviour within the organization.
Trust is critical in every direction. Not only must boards build trust with one another, but directors must also foster strong bonds with the company’s executive and the marketplace as a whole. Research from the CanTrust Index™ confirms this finding. Although it found declining trust levels across all institutional groups it follows, the study also found that industry-leading companies regularly outperform the overall trust level for their sector. Similarly, Paul J. Zak—who has spent decades studying trust—shows that high-trust organizations have higher productivity, experience lower turnover, and their people have more energy at work and collaborate better with their colleagues. In other words, top-performing organizations succeed in part because of their higher-than-average trust levels.
The 6 Cs of Trust
Every leader has their own approach to building trust. If you’re looking for a place to start, allow me to offer my 6 Cs of trust based on scientific principles and years of experience.
To earn the trust of your peers, you must demonstrate your competence—that is, your own judgement and expertise.
Do your colleagues feel they can rely on you to perform your duties? As Jack Zenger and Joseph Folkman outline in this excellent article in Harvard Business Review, you will know that others consider you competent when your expertise makes a significant contribution to your team’s successes, and you can respond to challenges quickly.
I have worked with some of the best and brightest in the boardroom, and if there is one thing I have learned, it’s that I can add the most value when I have earned the trust of my board colleagues. When trust is there, you can make great things happen as a board. A lack of trust, meanwhile, can lead to disruption & dysfunction.
I recently observed the importance of demonstrating competence when I was asked to take on a Lead Director role at TAA Distributed Information Technologies (CSE: TAAL), a vertically integrated blockchain infrastructure and service provider for enterprise. The opportunity didn’t appear on its own; it resulted from proving my competence in governance and building trust with my peers over many years.
It’s essential to be honest and straightforward with your peers. People can always feel when you are misleading them, even if they don’t consciously know.
To demonstrate candour, show openness and vulnerability. In a board setting, this could mean acknowledging mistakes quickly or disclosing relevant but sensitive information. Another example of candour is holding team members accountable, especially when they fall short of performance targets. John Kador says, “Nothing destroys trust in a high-performing team more than a leader tolerating sub-par performers.” Kador’s tips for showing candour and encouraging accountability include sharing relevant information, maintaining confidentiality, celebrating successes and treating everyone equally.
If you want others to trust you, you must trust yourself. That’s why it’s critical to demonstrate conviction in your actions, especially in professional roles. Of course, trusting yourself is easier when you’ve developed your own competency and character. That’s why continual development and self-reflection play a significant part in the process of building trusting relationships.
Do your actions align with your words, values and promises? People remember your commitments—and when you break them. For this reason, you should aspire to be consistent in your behaviour, so others know they can count on you to follow through on your promises. Zenger and Folkman tell us that people are more likely to trust a leader who honours commitments. Leaders who are rated most highly are those who “walk the talk,” keep promises and are willing to go above and beyond to achieve a shared goal.
The quality of your character determines your capacity to build trust effectively. Take some time to evaluate the choices you make and consider how they contribute to the view of your character that others hold. Do you adhere to a set of values or ethical and moral principles? In stressful or opportunistic times, do you demonstrate character or selfishness? When others complain about a situation, do you join in or elevate the conversation to discuss what can be learned? These acts affect the level to which others trust your character.
For example, in 2015, I was being interviewed for a board opportunity when the CEO opened by stating that he “was not interviewing me because I was a woman.” I paused. I knew his assertion was not appropriate for a board interview. However, I also realized I had two choices: I could be offended by this comment and leave the meeting, or I could lean in and demonstrate my character. I chose to lean in.
“I am not here because I am a woman; I am here because I can add value to your board,” I said. Instead of ending the conversation, my response led to a productive two-hour strategy discussion about the company and the industry. I chose not to proceed with the opportunity because it was not the right fit for me, but I am proud of how I showed my character in the moment.
It’s not easy to model courage in your everyday life, but it makes all the difference, especially in the boardroom. As Andrea Plotnick, Senior Vice President, Board and Executive Solutions at LHH-Knightsbridge, so eloquently explains, “Trust is earned by being a truth-teller. It involves taking an authentic and straightforward approach, avoiding platitudes, fully sharing what is known and transparently sharing when you simply do not know. Trust is built when words and actions are aligned.” Are you willing to be brave and vulnerable to foster trust?
In my experience, people are often hesitant to exercise their courage. For example, shortly after I was appointed Chair of a not-for-profit, it became clear that the Founder/CEO needed to be replaced. However, prior to my arrival, no one had been willing to bring the issue to the table. So, as the new Chair, I decided to act with courage and make the change. It was a difficult decision, but because I was acting courageously in the organization’s best interests, I was able to gain the trust of the board and replace the Founder/CEO.
Fostering trust with your board colleagues will create a more open, engaged and effective board. So, what are you doing to build trust in the boardroom? Use my 6 Cs to guide your board journey and be courageous. You might be surprised by what is possible when you commit to generating greater trust with the people around you.