The basis of trust
Trust in business is the expectation that the other party will behave according to the principles of integrity: honesty, consideration, accountability, and transparency.
Honesty is not just an ethical issue but also an economic one. To establish trusting relationships with employees, partners, customers, shareholders, and the public, organizations must be truthful, accurate, and complete in communications. No lying through omission, no obfuscation through complexity.
Consideration rises from a fair exchange of benefits or detriments that parties will operate in good faith. But trust claims a genuine respect for the interests, desires, or feelings of others, and that parties can operate with reciprocal goodwill.
Accountability means a clear commitments to stakeholders and abiding by them. Individuals and institutions must demonstrate that they honor their commitments and own their broken promises. No passing the buck, no playing the blame game.
Transparency means operating out in the open. When someone raises that something maybe hidden this is a sign of lack of transparency that leads to distrust. It is legitimate to have confidential information, but when it comes to information relevant to the stakeholders, active openness is central to earning trust.
Trust in institutions and corporations has fallen brashly since the 2008 recession. In the pre-blockchain era, trust in transactions derived from individuals, intermediaries, or other organizations acting with integrity. And when the other party was not known, we’ve come to rely on third parties not only to vouch for strangers, but to intermediate and register the transactions carried out online.
With the arrival of the blockchain, trust derives from the network and even from objects on the network. The ledger itself is the foundation of trust. To be precise, trust refers to buying and selling goods and services and to the integrity and protection of information.
Companies that conduct some of their transactions on the blockchain enjoy a trust bump in share price. Investors expect this greater transparency to know if the CEO has earned such a high bonus, smart contracts will require counterparties to abide by their commitments and voters will be able to see whether their representatives are being honest or acting with integrity.