If you have listened to the news in the last 12 months, you would almost be forgiven for thinking organisations are awash with unethical behaviour. Governance failures have shaken community trust in not-for-profits (NFPs), banking institutions, sporting codes and churches.
Today, it is no longer feasible for boards to assume all is well in their organisation. In fact, assuming good intent can often lead to blind spots that allow bad conduct to flourish.
Changing community expectations means that an organisation’s social license to operate is under threat, if poor behaviour by leaders and employees are left unmonitored.
Given the public support through donations and tax status, reputational risk can be greater for NFPs than for commercial boards.
CEOs and boards need to think about trust in their organisation and how to build and maintain it with all of their stakeholders. This requires having honest and transparent conversations about how to first build trust internally with employees and volunteers. After all, if your employees don’t trust you, you won’t be able to build sufficient trust with your external customers.
Leading with trust requires boards to govern differently. Let’s take a look at five steps to help you start the conversation on how to consider trust in your NFP:
1. Social Purpose and Values
Typically, most NFPs have a compelling social purpose that attracts passionate volunteers, employees and donors. However, aligning the right values (or behaviours) to your purpose is where I see a lot of NFPs unintentionally create an emotional disconnect.
Leaders must model the right behaviours that are aligned to your values to help employees know what behaviours are acceptable and which are not. If there is a gap between words and actions, employees will have difficulty trusting leadership. Not living the values creates cynicism and a lack of commitment by employees.
Ensure you values are clear, understood and aligned to your purpose.
2. Get Alignment with Trust
Your purpose and values provide the framework for how trust needs to operate in your organisation.
While few would argue that organisational trust is important, the challenge lies in ensuring commitment and buy-in from all board and management team members. Unfortunately, resistance is common and is the most important hurdle you need to tackle.
A critical step in improving trust requires talking about it openly. This involves the senior leadership team and board members being willing to honestly look at themselves and how the organisation operates. Many low-trust leaders will either pay lip service to building trust or openly try to discredit efforts to make improvements.
Avoid telling your board or leadership team that you want to start improving trust. Using other words like ‘enhancing collaboration’ or ‘high performance’ are much better received. In our experience, we have found the following approaches to work the best:
- Undertake a leadership team, board or employee assessment that provides results on how much people trust each other. Few leaders can argue with hard data.
- Have an external expert come in and talk to your leaders about how trust operates in organisations and the benefits of getting it right. Getting internal members to talk about trust can actually backfire.
3. Assess Your Biggest Trust Gaps
Once you have buy-in from your board and management team to openly discuss and identify trust issues in your organisation, you will want to look at trust in terms of:
Strategy and Culture
Identify what leadership behaviours you require that match you strategy and how those behaviours need to be demonstrated according to your values. How can you ensure they are communicated effectively and consistently in your processes, policies and messages?
Refer to your risk register and assess your performance through the lens of trust. For example, ask your board: what risks are we exposing the organisation to, because there is low trust?
Map out all of your stakeholders and identify risks for each one. Assess how each relationship could benefit from more trust.
4. Measuring Trust
According to the Edelman Annual Trust Barometer, trust is an important organisational metric in itself because it is essential to your social license to operate, and therefore, your survival.
Where possible, do some sort of measurement: an annual employee engagement survey, regular Pulse check or 360-degree leadership survey. Customer satisfaction monitors also provide valuable feedback.
In addition, make sure you do some sort of qualitative research to uncover richer insights. Focus groups and in-depth interviews can be very revealing. But as a board member, observing how employees interact will help you form a picture of what is really going on.
Where possible, have regular site visits with both internal and external customers, to get a real feel for trust levels. Ask incisive questions to help verify what management tell you.
5. Trust in Governance
To truly embed trust and systemise it throughout your NFP involves making trust a governance issue.
This involves setting performance metrics that include monitoring trust according to the behaviours required by the strategy. Such metrics are ideal lead indicators that help the board determine how management are performing.
Of course, board members set the cultural tone for an organisation. How you behave gets modelled by the senior management team, which is then modelled by employees all the way down to the front line.
As a board collective, avoid inquisition-style conversations. Instead, encourage deep, exploratory discussion with the management team rather than just reporting.
In today’s fast-paced world, the more trust you have across your organisation or teams, the faster you can operate.
Yet, this can only be achieved if trustworthiness is institutionalised into the very fabric of an organisation’s architecture and behaviours. It takes a strong board to champion trust and ensure that the right systems are in place, from top to bottom.
How are you going to start building trust at the board level?