Board and management must work together to deliver the strategy. This requires mutual trust and respect. If you believe that the level of trust between your board and management teams could be enhanced or is lower than optimal, you need to act.

To help directors who want to strengthen or rebuild trust between their company and its board, we have developed this checklist. The questions will help even if you are an experienced director or chair and have been part of this board for many years.

The questions below provide comprehensive coverage across:

  • Scoping and defining the issue
  • Developing a response
  • Removing obstacles
  • Implementing your preferred response
  • Continuing the journey

The questions are designed to start you thinking about issues that you may have noticed but not yet considered addressing as well as to help you to notice issues of which you may currently be unaware. The answers are not necessarily good or bad; they should reflect the current and desired state of your unique board and its supporting committees.

Don’t ask all of the questions. Trust yourself to recognise and ask the most important ones. You can return to the list at intervals to consider your progress. We recommend using the list to stimulate your thinking:

  • When you first suspect that trust may have eroded
  • When you raise the issue with your board
  • Before you discuss the issue with external stakeholders
  • When appointing professional help

At the end of the check list, we have listed some references that you may wish to investigate for additional reading on the topic. We have also included some suggestions for putting into action the ideas that result from considering the checklist.

Scoping and defining the issue

 
1. What evidence do you have to suggest that trust between the board and management team may have been eroded? (make a list)
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2. Who else appears to share your concern? What evidence do you have that they share your concern? (make a list)
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3. When you look at your two lists, which items are clearly facts that can be independently verified, and which are assumptions that you have validly made based on your experience and expertise?
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4. Is the erosion of trust pervasive, or is it confined to a few individuals? Does the erosion come from the board, management, or both?
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5. What is the cost of the reduced trust? Is it adversely impacting company results, staff well-being
 
1, information flows, robustness of discussions, quality of decisions, or something else?
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6. What are the long-term implications if the current situation is allowed to continue?
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7. Who would benefit from re-establishing trust? Can you engage their assistance?
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8. Who would benefit from preventing trust being re-established? Can they be relied upon to put the company’s needs ahead of their personal benefits?
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Developing a response

 
9. What is your first instinctive reaction to the erosion of trust? Does that reaction align with or violate any of the company’s or your personal values
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10. Do any ‘rules’ apply to the situation? Consider laws, regulations, commonly accepted governance practice, codes of conduct and guidelines.
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11. How have others successfully responded to a similar loss of trust? Is their response applicable to your situation or are there learnings you can glean?
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12. Has the issue been discussed with the CEO? If so, what course of action did the CEO support following the discussion?
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13. What other options can you conceive of that might also solve the issue?
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14. Who else is involved? What are their needs, wants and interests? How should these needs, wants and interests be prioritised?
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15. Can you discuss the issue with your board
 
2? Can you raise it with your chair? (It is ideal to raise it with your chair first, unless they are part of the problem, in which case you may need to determine the best approach to broaching the issue.)
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16. Are the board committees working well or is the problem of eroding trust evident there as well? Would reallocation of directors to other committees help or hinder trust building?
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17. Can you brainstorm the potential options to respond to the issue? What are the pros and cons of each potential option?
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18. Which option is in the company’s best long-term interests? Does the chair, board and management agree?
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Removing obstacles

 
19. What stands in the way of implementing the preferred option?
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20. How can remove the obstacles?
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21. Do you need specialist culture, ethics, or legal assistance?
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22. If part of your preferred option is to remove people who are part of the problem, what risks does that invite? Can you withstand the potential impact of these risks?
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23. Is another option likely to be easier or less costly to implement and still produce an acceptable outcome?
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24. Is your language positive and focused on the potential solution or negative and focussed on the problem?
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Implementing your preferred option

 
25. Have you engaged specialist help?
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26. Do you have the cohesive resolve of the board to implement the preferred option?
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27. What needs to be done to maintain that resolve? Is there a ‘walk away point’ or non-negotiable position?
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28. Have you discussed the preferred option with the management team (not just the CEO)? Do they support the proposed intervention? Do you need to do anything to prove goodwill or earn their support?
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29. Do you have an agreed plan of action, with identified review points and contingencies?
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30. Has the board communicated openly with management about the issues and demonstrated a willingness to work together to resolve them?
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31. Have you fully utilised the company secretary as a channel of communication between the board and management? Who else could help?
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Continuing the journey

 
32. Have you identified some ‘little wins’ that can provide evidence of the positive progress being made?
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33. How will you recognise and celebrate your progress?
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34. What have you learned from this process about yourself, the board, and the company?
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35. What have your board colleagues learned?
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36. What has the management team learned?
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37. How can you develop a stronger relationship with the management team? Are there opportunities for joint attendance at social events, conferences, etc.?
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38. How will you ensure that trust is not eroded in future? Can you enshrine the required supporting actions in your board charter, protocols, schedule of activities, code of conduct and operations?
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39. Have shareholders, customers, suppliers, analysts or the media become aware of the issues? Do you need to talk with any external stakeholders about the journey or close any communication loops with them?
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40. How will you protect the new relationship?
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Taking action

Read the questions and note which ones you can confidently answer. Make a record of any actions that you wish to take to help answer any questions that you were not confident about.

This is not an issue for an individual director to approach alone. Discuss your recommended first steps, and your rationale for them, with the board chair or the chair of the board committee that oversees culture.

If you are the chair, you may wish to share your observations from reading these questions with your own board mentor, before discussing them with your board and/or members of the management team.

Additional reading and reference sources

Rebuilding Trust in Banks: The Role of Leadership and Governance, J Zinkin, Wiley, 2013

Rebuilding Trust In The Workplace: Seven Steps to Renew Confidence, Commitment, and Energy, D Reina and M Reina, Berrett-Koehler, 2018

Toxic: A Guide to Rebuilding Respect and Tolerance in a Hostile Workplace, C Lewis, Bloomsbury Business Press, 2021

The Power of Trust: How Companies Build It, Lose It, Regain It, S Sucher and S Gupta, Public Affairs, 2021

Dilemmas, Dilemma, Practical Case Studies for Company Directors, J Garland McLellan, Great Governance Press, 2016

101 Boardroom Problems and How to Solve Them, E Mina, Amacom, 2009

Setting the Tone at the Top, B Seldon and M Muth, Australian Institute of Company Directors, 2018

Don’t; How Using the Right Words Will Change Your Life, B Seldon, Mercier, 2016