Discussion Truth, Trust and Transparency

A question of trust

Plummeting public trust is sweeping the globe. We sense this erosion of trust in social media and domestic politics, in our communities, and even at our dinner tables. Distrust infuses public rhetoric and political debates, obstructing action in the public interest and undermining the ability of social institutions to function and serve the people they are intended to benefit.

As Harvard professor Tarun Khanna describes in his book Trust: Creating the Foundation for Entrepreneurship in Developing Countries, trusted institutions move societies forward by playing two important roles: They dramatically simplify daily life, and they enable new collaborative solutions. Trusted institutions are grease in the social machine. When citizens lack trust, they are less likely to comply with laws and regulations, pay taxes, tolerate different viewpoints or ways of life, contribute to economic vitality, resist the appeals of demagogues, or support their neighbors. Without trust, societies are at risk of chaos and conflict. They are less likely to create, invent or invest.

This is hugely important for the UK right now, with Brexit looming and organisations beginning to move operations offshore. We need to accelerate the rebuilding of trust and confidence in business.

But how can we do that? the mistake is to think that regulation will fix it; what we are really talking about is the integrity of markets. The challenge is that there has been an awful lot of legislation – and whilst it has brought a degree of governance to proceedings – the boards of NEDs have struggled, with a lack of time and resources, to uncover the truth of what is often happening.

The truth may have been obscured with mountains of data – and power imbalances mean that investors or consumers do not have the resources to discover what is really happening.

Is it okay to just use your own version of the truth?

When we talk about the truth in business, the academic method case study approach used by Harvard Business School has created a system of thinking that encourages leaders to talk in terms of ‘dilemmas’, and there is no ‘right’ answer. This, in turn, has its roots in postmodern thinking and the idea of moral relativism – that one culture’s truth may not be the truth of another culture. It proposed that ‘the truth’ of one group was only a power play – with the powerful looking to impose their truths on wider society. It was these views that underpinned student ‘revolutions’ of the 60s, and their battles against the outlook of old institutions. Of course, a century earlier Nietzsche had foreseen the challenges that would ensue, that without our belief in a higher order that told us what was good and bad we would live in a permanent state of uncertainty about what to think – that we would have to become our own points of reference.

Whilst this has been a great spur for greater creativity and, initially, a diversity of thought – with the arrival of the internet and social media it has led to a re-enforcement of our interests and desires, which are captured and fed back to us constantly. It is hardwiring separate versions of the truth, leading to emergent tribalism. Insular groups speak only to themselves, satisfied that their view is the right view, that other views are tantamount to heresy. People tune into what they like to hear, preferring often not to have their outlooks challenged.

We need truth now, more than ever

• For news: what is news one minute can change with a tweet. We live in a 24/7, wall to wall, instant news cycle – even news desks struggle to keep up; to make sure that every facet of the stories they cover has been fact-checked.
• In business: many investors lack the resources to check every detail of a company report, relying instead on indices and ESGs. In government, professional fact checkers now report on whether statements by MPs in the house of commons are actually true.
• For consumers: website product ratings are notoriously skewed by self-reviewing methods. Concerns grow around the asymmetrical power relationships between individuals and corporations.
• For financial services: a market without trust is like a gearbox without oil. If you cannot rely on the information about companies then would you invest in them? And can you trust what you are being told? Does it give you the picture you need to risk your finances?
• For insurance: can you insure business, where valuations may be less grounded in fact and more linked to the opinions generated by social media?
• For individuals: can you trust the comments on the products and service reviews you read online, or are they fake?
• For governments, can you trust the reports that are prepared to you as correct or do we need fact checkers to correct misstatements?

When they come to do the Inquiry into what happened – they will undoubtedly identify a lack of truth, a loss of transparency and a resultant breakdown in trust.