Internal Trust: Building Alliances from Within

This paper explores the subject of trust within an organisation: what creates blocks to internal trust, the implications of such blocks and how best to create structures that encourage stronger working relationships and alliances.

Published on 28 March 2017
St Paul’s Institute and the Chartered Institute of Management Accountants have collaborated on the subject of ethics and corporate culture for several years. This year, a roundtable explored the subject of trust within an organisation: what creates blocks to internal trust, the implications of such blocks and how best to create structures that encourage stronger working relationships and alliances.
The objective was to consider how to create more open and resilient corporate cultures, better inform decision making and in turn add value for long term success. While there has been a heightened focus on, and increased recognition of the importance of corporate culture in recent years, there remain significant weaknesses in the embedding and in the “living” of the stated ethos and values that many companies espouse as part of their corporate culture.
Recent CGMA research highlighted that companies globally are struggling to improve levels of trust and build collaboration both within the organisation as well as with customers, suppliers and other stakeholders. Leaders recognise the need for more employee input into decision making. 70% admit there is moderate or significant room for improving active collaboration between leaders and employees; 65% say the same about trust. Even more concerning, 43% of those surveyed stated that improvement in levels of trust amongst executive peers was needed.
The paper highlights the following main areas:
  • What are the warning signs of a breakdown in trust?
  • What creates disconnect and what are the implications?
  • What are the warning signs of disconnect
  • Fear and its consequences
  • What to put in place and how to embed it
  • What is the role of accountants in business
Internal trust is reliant upon the establishment of a corporate culture that promotes ethical and responsible behaviour. Creating, maintaining and adapting such corporate culture remains a challenge. The larger and more complex the organisation, with multiple partners and suppliers, the bigger a challenge such work can be, particularly in hyper-competitive, fast changing sectors. The role of incentives (not necessarily financial) versus sanctions in creating a constructive culture within an organisation is critical. Why people work and why they want to do well at work, including the respect of their peers and a sense of purpose, needs to be integrated into the culture. Examples of good practice and best practice should be highlighted and publicly praised. 
Trust, culture and leadership at all levels in the organisation are inextricably linked. They rely on openness, honesty and straightforward speaking and action measured by a clear sense of accountability that places learning above blame. Trust is reliant on what employees see played out each day in their workplace. More than any other stakeholder, staff can see the division between corporate rhetoric and corporate action and will respond accordingly. For people to truly be an organisation’s most important asset, management teams and the Board need to align more honestly what they say with what they do. 
This is why embedding values, purpose and acting in accordance with ethical codes has to be seen throughout different levels of leadership, enabled by the Board and the C-Suite. The company’s Code of Conduct should be reinstated on a frequent basis and analysed for effectiveness by relevant Board committees, under the guidance of a named individual responsible for the Code (i.e. Chief Compliance Officer). The articulation of the values themselves, alongside related codes and policies, needs to be clear and shared; with the understanding that a lack of consistency about the interpretation of values, and particularly how they are lived out by senior staff, can lead to problems. Failures and damage caused in the short term can be weathered when there is a strong culture anchored to purpose, values and the application of ethical working.