Leading global lawyer Sir Nigel Knowles has called on businesses to close a widening “trust gap” between the corporate world and the general public.
Sheffield-born Sir Nigel, who is joint global chief executive and managing partner of one of the world’s largest law firms, DLA Piper International, was speaking during a visit to South Yorkshire to deliver a lecture, entitled Rebalancing the Trust Deficit, at Sheffield University, where he is a visiting professor.
Drawing on research into corporate trust, carried out for DLA Piper by polling firm Populus, Sir Nigel urged companies to improve the way they communicate and exceed the requirements of regulations, instead of seeing them as a barrier they had to find a way around.
And, he warned that the risk to the reputation and future prospects of companies that failed to respond had been heightened by an end to the “age of deference” and the “revolution in social media.”
Sir Nigel told Star Business the global financial crisis, MPs’ expenses scandals and phone hacking had all helped to undermine the trust people had in leaders.
Trust might seem a nebulous concept, but companies that developed trust and confidence in their operations secured a competitive advantage and could move at a faster pace, while companies that thought they could gain trust by funding Corporate Social Responsibility projects and following regulations were mistaken.
“Regulation sets out what you must do. It doesn’t set out what a good and responsible business should do,” said Sir Nigel.
“If people view regulation as something to navigate their way around then they will not re-establish trust between themselves and their stakeholders.”
Sir Nigel warned that the number of people who could be considered to have a stake in a business had expanded enormously and now included governments, regulators and non-governmental organisations as well as shareholders, suppliers, customers, employees and joint venture partners.
“There has been an enormous revolution in social media and the age of deference, when people did not speak out, has gone,” said Sir Nigel.
“Nowadays people think they can speak on any topic and convey any view, without necessarily knowing what they are talking about.
“The leader of a business had to engage with all these people and cover all bases.
“If you haven’t got a leader willing to stand up, be accountable and be transparent, trust will be eroded.”
Copies of the Populus Report, The Trust Deficit – Views from the Boardroom, are available from http://www.dlapiper.com/uk/