Anthony Hilton: Culture of self erodes our trust

The Lord Mayor of London has asked Sheriff Richard Sermon, one of the best known financial PR practitioners in the Square Mile, to assess the problem of the post-crisis lack of trust in financial services.

Anthony Hilton: lack of trust in financial services
Anthony Hilton: lack of trust in financial services

One can see why this is desirable. There is a mountain of evidence to show businesses that have generated a high level of trust are more resilient to shocks and more stable over time.

But can trust simply be created by rulebooks, processes and procedures? These can certainly deliver higher levels of customer satisfaction but that is not the same thing. Trust is tied in with notions of fairness and requires putting the customer first - selling them a cheaper item if they really do not need the most expensive; forgoing a fee by advising clients not to do a deal they think it is not in their interest.

A management consultancy, The Foundation, ran a seminar recently that looked at why trust seemed to be in decline across the business world. In the interests of full disclosure I should say I know about this because I am on The Foundation's advisory board.

Several things emerged. First, if there was ever a golden age of trust it was when society was more hierarchical and deferential than it is today. Employees obeyed orders but in return they trusted they would have a job for life and a pension at the end of it. When it came to complex problems in medicine, law, accountancy, they trusted the judgement of professionals.

Society changed from the 1960s but the big catalyst in business was the emergence of shareholder value as a creed. This clearly said that the only concern of management was the interest of the shareholders. At the same time Prime Minister Margaret Thatcher famously said 'there is no such thing as society' and delivered a blunt warning that people should look after themselves. Meanwhile the professions destroyed their reputation for integrity by becoming nakedly commercial.

People's initial instincts are still more inclined to trust rather than distrust. But as long as the culture of business is rooted in progressing the interests of one set of stakeholders, it is unlikely to be trusted by anyone else.

Anthony Hilton is City commentator on London's Evening Standard

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