The Royal Commission into Australia’s banks has now been going a couple of months. It’s expected to run for at least one-year with public questioning of bank executives. If this was a boxing match, it would probably have been stopped already.
The following ‘gems’ have been reported in the press in the last two-weeks alone:
AMP Limited, Australia’s largest wealth manager, misled regulators to cover up charges it made where no services were provided to clients (‘Business Times’ 19th April). AMP saw $2.2 billion wiped off their market value and the CEO has resigned (‘Guardian’ 28th April)
Commonwealth Bank charged fees to dead people (‘Sydney Morning Herald’ 20th April)
Westpac paid bonuses to financial advisers who it knew were ‘churning’ clients into higher fee-paying investments (‘Sydney Morning Herald’ 20th April)
ANZ Group lacked adequate controls to ensure its advisers were complying with the law (Reuters 27th April).
And there’s lots more.
Our bankers might take consolation from knowing that overseas banks are no better (For example, ‘Just when you thought banks could stoop no lower,’ an article about UK Metro Bank- ‘Financial Times’ 28th April).
Kelly O’Dwyer, Australia's financial services minister, said that the country's banks have a lot of work to do to regain the public's trust. (‘Business Times’ 19th April). However, when it comes to a lack of trust, the banks aren’t alone – a lack of trust seems to be at epidemic proportions right across the board.
The 2018 Edelman Trust Barometer, the largest and longest running study of trust in the world, paints a bleak picture across all Australian institutions: media, government, business and NGOs.
‘Trust in Australia continues to decline across all 4-institutions with 5-year lows for each. Trust in media is at an all-time low of 31%, government is 35%, business 45% and NGOs 48%. All 4-institutions are now in ‘distrusted territory.’
It’s worse in the USA, where the Edelman Barometer indicates there’s been a virtual meltdown in trust levels, especially with government.
When it comes to business, the reality is, of course, that the importance of trust cannot be underestimated.
We should know; working in recruitment trusted relationships with clients, candidates and our own team are at the heart of our business.
In their 2018 Human Capital Trends Report, Deloitte lead on the growing importance of businesses becoming social enterprises: ‘judged not only on their financial performance, quality of service or workforce satisfaction but also on their connections with the external world, customers, partners and their impact on society at large.’
In short, they’ll be judged on the trust they generate not only on the more ‘traditional measures.’
The authors say that ‘people today have less trust in their political and social institutions than they have in years; many expect business leaders to fill the gap.’
So, to help leaders take up the mantle, here’s some pointers on how to build trust in business. They’re adapted from an American book, ‘Everything Matters’ by Bob Chapman, who runs Barry-Wehmiller; a company Simon Sinek uses as an example of best practice in his book ‘Leaders Eat Last.’ They might be a bit corny, but they get the main points across:
Communication – we build trust through authentic communications; not just words but words backed up by actions
Competence – we perform the tasks that we are asked to complete. We are competent technically and our leaders take responsibility to do the things we say we’ll do
Compassion – we care about the concerns of others and demonstrate this through our ability to listen, to take others’ perceptions into account and have empathy
Consistency – people feel they will receive a consistent reaction whether they come to us today or tomorrow
Integrity – we take decisions and action in alignment with the values, vision and direction of our organisation.
How do the bankers score on these?
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