For board directors, the absence or presence of trust within an organization and its ecosystem has taken on new urgency.
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In the wake of COVID-19 and its subsequent economic shocks, trust is emerging as a crucial issue for board directors. In the initial stages of the pandemic, levels of trust suddenly made a stark difference: Work policies impacted whether employees stayed healthy or fell ill, and continuity plans held together or fell apart with broader layers of damage than anyone had initially expected. In my experience as a director, and in conversations with many members of the Extraordinary Women on Boards group representing more than 300 public and private boards, the absence or presence of trust within an organization and across its ecosystem has taken on new urgency for assessing potential risk.
For directors, this creates a new lens for evaluating management—and for considering our own effectiveness together in the boardroom. Beyond the implications of the moment, an important lesson from this crisis is that trust can no longer be assumed; boards must now interrogate it.
During the financial crisis, when I managed the brand of a major Wall Street firm, the interconnectivity of systems and securities revealed surprising butterfly-effect relationships across global markets. Today’s crisis has magnified that effect. We are now agonizingly aware that every person is connected, and that we are dependent on one another’s actions, choices and behavior. We are reminded that a business is a series of touchpoints of trust, and each of those touchpoints is the hub of a set of relationships. The quality of and investment we make in these relationships determine our shared vulnerability and strengths, and our opportunities.
The relentlessness of this crisis leaves little space for boards and management to reflect. But we should press pause and take stock of the real-time lessons we’ve learned to date about risk. The Trust Touchpoints framework and five scenarios provide actionable examples of where touchpoints of trust matter most and why, and how to measure and monitor that trust to manage risk. The crisis also provides a crucial reset moment for directors, corporate officers and senior leaders to revisit foundational questions about the dynamics within the boardroom:
We are living through new and unexpected scenarios, creating opportunities to observe, gather data and analyze. Here are some of the emerging questions about trust that boards are asking and that senior management should be aware of and perhaps asking as well.
ASSESSMENT OF THESE 5 TRUST TOUCHPOINTS CAN HELP BOARDS AND MANAGEMENT BETTER ANTICIPATE AND ADDRESS RISK
The Board and Management Relationship
The Leader’s Relationship with Employees
The Organization’s Relationship with the Leader
The Relationship Between the Company and Its Customers
The Company’s Relationship with Its Ecosystem
The Future Is Boards Challenging Themselves and Management
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