As in all relationships in life, trust is a key ingredient of a long and healthy relationship between a company and its shareholders. But trust is a fragile thing that takes a long time to gain, very little time to lose and a lot of effort to rebuild.
Starting with the Boeing 737 Max scandal, the latest episode of the Governance Matters podcast asks what boards can learn about managing trust in their companies.
When it comes to the role they play in helping companies become trusted, ‘it starts with who’s at the table,’ says Sandra Sucher, professor of management practice at Harvard Business School and author of The Power of Trust: How companies build it, lose it and regain it. ‘If you look at the composition of the Boeing board, it was not structured for success.’
Speaking to podcast host Jeff Cossette, Sucher argues that the 737 Max story shows how industry knowledge and expertise at the board level in risk assessment and scenario planning, managing ‘truth and realism’ and ensuring accountability are all paramount in mitigating the risk of losing trust.