12 April 2021
Trust matters today more than ever before. In the era of fake news, online animus and political polarization, trust is the lens through which people make decisions about what they believe in and value. There is also an undeniable link between trust and sustainable commercial success — the most trusted organizations experience better financial performance, build loyal customer bases, and have more reliable workforces. Against this backdrop, society is demanding more from corporations, leaders and investors on critical issues such as the climate emergency and rising global inequality.
This series of board papers will explore the evolving Trust Continuum and how organizations can meet new expectations in the era of stakeholder capitalism — not only of their shareholders and investors but all stakeholders — by building long-term trust based on purposeful, transparent and consistent actions and interactions.
Leveraging Technology to Promote Employee Trust
Fostering employee trust is a critical component of any stakeholder governance framework focused on sustainable long-term business success. Increasing digitalization of workplace functions and emerging technologies require organizations fully to understand the risks and opportunities that this brings, particularly in relation to employee trust. This board paper examines the inherent value of employee trust to businesses, risks around emerging workplace technologies, key tenets around responsible technology deployment, and how organizations can leverage technology as a vehicle for building trust.
Stakeholder Capitalism and Dividends
During the COVID-19 pandemic, as businesses look to make immediate decisions that may carry far-reaching reputational and commercial risks, boards find the concept of stakeholder capitalism tested in real time. In this board paper, we examine what considerations boards need to make in respect to the payment of dividends to shareholders, all while guarding against the erosion of stakeholder trust and navigating the rocky path ahead.
The Changing Face of Leadership
In this board paper, we examine the fundamental role that leadership plays in building trust among stakeholders and the need to convert words and positive intent into tangible meaningful organizational change. We ask what the key dimensions of leadership required to develop trust might be, so that boards can build long-term sustainable value creation.
Additional Resources
>> Diversity, Inclusion and the Great Pandemic
>> Principles for Purposeful Business
Sustainability and Performance: Two Sides of the Same Coin
In this installment of the Trust Continuum series, we examine the connection between sustainability, governance and business performance. We focus on how and why corporations must operationalize environmental, social and governance (ESG) factors across the commercial organization and address the challenges of doing so. We contend that sustainability and business performance are two sides of the same coin and suggest that corporations must adopt comprehensive strategies that more closely connect sustainability to business impact. To achieve this objective, corporate leaders and the boards overseeing them must recognize the importance of sound stakeholder governance.
Additional Resources
>> Demystifying ESG Seminar Recording
>> WBCSD Sustainability Board Governance Report
>> Shaping a Sustainable Economy Report
COVID-19: Practical Considerations for Boards – VUCA Times with an Additional C
In light of the Coronavirus (COVID-19) crisis, companies, governments and society at large are living through unprecedented times. This board paper and accompanying video examines how boards' responsibility to exercise their oversight role is more critical now than ever and could define the longer term sustainability of their companies in the eyes of their investors and how trusted they are as employers, business partners and members of the communities they operate in.
Additional Resources
>> Practical Considerations for Boards During a Pandemic
The Evolution of Trust in the Era of Stakeholder Capitalism
This board paper looks at how efforts to build trust have continued, but the challenge today is greater and more complex as companies try to respond to the new demands of a complex ecosystem of customers, employees, shareholders, regulators and society at large, as well as external challenges including climate change and the ever changing political landscape.
Additional Resources
>> Questions Directors Need to Ask in the Age of Stakeholder Capitalism
>> The Modern Dilemma: Balancing Short- and Long-Term Business Pressures
>> How to: Help Clients Build Trust
For further information, please contact:
Milton W. M. Cheng, Partner, Baker & McKenzie
milton.cheng@bakermckenzie.com
