Trust in institutions and leaders is on the decline. That's bad news for organizations navigating difficult times. How can companies build trust, and can you repair it once it's been broken? Professor Bill McEvily joins the season premiere of the Executive Summary podcast to explores those questions and more.
Trust in institutions and leaders is on the decline. That's bad news for organizations navigating difficult times. How can companies build trust, and can you repair it once it's been broken? Professor Bill McEvily joins the season premiere of the Executive Summary podcast to explores those questions and more.
Show notes:
[0:00] Trust in institutions, businesses and CEOs is on the decline.
[0:33] Meet Bill McEvily, a professor at the University of Toronto, and an expert in trust-building
[1:42] What is trust, exactly?
[2:46] What are the three dimensions to trust?
[4:02] What role does trust play in a workplace (and why is it handy for dealing with chaotic times)?
[5:46] What breaks trust?
[6:15] What are examples of companies breaking your trust?
[7:39] What are the consequences when a company breaks people’s trust?
[8:24] There is no magical formula for repairing trust once it’s been broken. But consistently delivering on your stated and unstated promises is a good start.
[9:15] Communication is really important for trust-building.
[11:21] How do you build trust when you aren’t directly connected to an individual? In comes Bill’s concept of “prismatic trust”
[12:26] Organizations can learn from EZ Trade, which has systems in place specifically designed to help instill trust in people you’ve never met.
[13:14] So what signals are you, as an organization, sending about who, and what is trustworthy?
[14:18] “It's important for people to understand that there are mechanisms for ascertaining trust, even when we don't have the ability to know people personally, and that, I think, is necessarily our future is collaborating with people that are really distant from us and relying on people that are really distant from us. Human beings are ingenious in figuring out how to trust strangers. But therein lies the paradox of that you open yourself up to harm, I think of it as an innately human thing. So it's not just something that's important in terms of running a business or any kind of organization. It's just how human society functions.”
Megan Haynes: For the past 25 years, PR firm Edelman has released an annual global trust barometer. And unfortunately, our trust in institutions — like government agencies and businesses — and individuals like CEOs, is on the decline. In 2025, just 37 per cent of Canadians had trust in CEOs, down from 46 per cent a decade earlier.
Globally, Edelman finds that fewer people are trusting of their workplace: this year, 25 per cent of people said they do not trust their employer to quote do what’s right – a three percent increase over 2024.
Bill McEvily: There's been, systemic decline in trust, especially in all kinds of institutions, so you can look at government, you can look at politicians, you can look at business.
So what's behind this decline in trust? I think we have a lot of questions still. Is it that we just think that all of our leaders are corrupt and are in it for themselves, that might be part of it? Is it that they're incompetent? You know, understanding the differences here, I think really matter, and I don't know if we have been able to pinpoint that.
My name is Bill McEvily. I am a professor of strategic management here at the Rotman School. As a researcher, I focus on relationships and networks of relationships in organizations, and how that creates strategic value for organizations, as well as how those networks develop, form and evolve.
MH: Bill also studies trust: What breaks or nurtures that trust? How does it influence a company’s successes? How has a fully remote or hybrid workplace changed the equation? And crucially, as we’re faced with an increasingly untrusting world, can businesses get it back once it’s been broken? Welcome to the Executive Summary, I’m Megan Haynes, editor of the Rotman Insights Hub.
Musical interlude.
MH: So what is trust exactly? It’s a bit complicated, but also intuitive at the same time. We trust our partners to be faithful, our friends to be supportive, and our family to be loyal. In organizations, it’s similar. We trust our colleagues to do their jobs so we can do ours. We trust our managers to protect our interests.
We trust HR to pay us on time. We trust we won’t be fired without cause, and we trust that our CEOs aren’t secretly villains from a James Bond movie, plotting world domination.
BM: We have certain expectations of what that other person will or will not do, and when they don't live up to those expectations, or they behave in some way that we prefer they would not, then we're vulnerable. So it's the metaphorical falling backwards to see if somebody's going to catch you. So trust is the willingness to be vulnerable to another person's actions based on some positive expectation that we have about that person's motives, intentions or behaviors towards us.
Vulnerability is the key word there.
MH: Bill says there are three dimensions that shape our trust – what he calls the ABI model – Ability, benevolence and integrity.
BM: So the ability one is kind of the most common. It's what people intuitively think about. Particularly in a business setting, when we say we trust someone, you know, we rely on them to do what they say they're going to do, when they're going to do it, deliver it at the level of quality that we expect. That's the ability aspect. Benevolence really means that you're looking out for my best interests, you understand what's important, and you actually care about that. And so that's a different kind of violation, if you will, than whether or not you're being reliable. And then there's a third kind, which is called integrity, which really comes down to do we hold similar values?
MH: Trust can exist between two people, a person and a group, a company and its employee, and of course a citizen and their government.
BM: Trust has this notion of there being a leap of faith. At some level, I get some cues and some clues about you, and I think this is going to be beneficial for me, so I put myself out there. That's the vulnerability part that is necessary for us to be talking about trust. And with vulnerability comes the potential of harm, and at times, actual harm.
MH: We’ll talk specifically about harm in a few moments, but before we get to that, it’s important to look at the role trust plays in our work, day to day.
BM: I don't mean to suggest that it's some sort of cure all or a panacea. If we're thinking about this in the work context, there are an infinite number of things that happen in the span of days and weeks that nobody is specifically telling us to do or to not do. I think of trust as kind of like the connective tissue that makes organizations work or not. There are all these things that we need from people that we work with, that they're not compelled or obliged to do for us.
When there's some sort of an extreme case, a shock, or there's some sort of uncertainty that we're experiencing, that's a moment where neither one of us anticipated that, and suddenly how that affects your interest versus my interest may differ, what people do under those circumstances where there's some uncertainty, trust really matters. And of course, the combination of those two things together, I depend on you, and suddenly there's this uncertainty where the world is changing. Trust is one of the things that can allow us to navigate that.
MH: So, considering today’s political, civil and economic uncertainty, trust is probably more important than ever.
Musical interlude
BM: Lots of times people come to me and they say they want to talk to me about trust, but what they really want to talk to me about is repairing trust because they've lost it. And you know my answer is the best way to repair trust is to not lose it in the first place.
MH: Because trust is based on our ability to be vulnerable, it means that trust can be easily broken.
BM: In a simple sense, it's really violating the expectation. Trust gets violated for lots of different reasons. It all looks the same on the surface, but it gets complex when you break it down.
MH: We only have 15 minutes, so we will keep it relatively simple: trust is broken when something expected is not delivered.
BM: I clearly had this expectation, and somebody else just didn't uphold that when I had good reason to believe they should have.
MH: Sometimes trust is broken because a stated expectation isn’t met – you did not get the promotion you were promised, or your colleague did not complete their portion of their work as assigned.
But it can also be an unstated expectation: I trust my organization will promote people based on the merit of their work, and when the CEO’s son is promoted over me, I worry nepotism is a factor instead. Or I trust that if I go to HR with a complaint, they’ll keep it confidential. When the company brings in the legal team without asking me first, it feels like a violation of their responsibility to keep that confidentiality.
And this can be at an individual level – I trust my organization to treat me fairly.
But also at a wider societal level – I trust my company when it says it values equality and when it capitulates to political pressure that’s in violation of those values — say walking back support for LGBTQ employees — I lose trust in my company. If you’re a leader or a manager, there are ramifications for violating that trust. Even if you see the short-term benefit of breaking your word — say, you aren’t going to honour your promise of promotion because of budgeting issues; or you walk back your LGBTQ support because a loud portion of your consumer base is boycotting your product — it might not be worth the long-term consequences.
BM: I think about trust is like an asset, just like the hard assets that companies have, it's equipment, it's knowledge, it's resources and it's the goodwill of their employees, and that goodwill is no longer there, or it's not there to the extent that it was. There are so many times when we're able to do our work or do it much better because somebody was willing to go above and beyond and just help somebody else out for a whole bunch of reasons, and they're no longer willing to do that, which is, of course, it's really harmful to the organization longer term. They just don't have that reservoir of goodwill.
Musical interlude
MH: So how do you build, maintain and repair trust? Unfortunately, there is no magical formula.
BM: what is going to be really effective and useful at one organization is going to be utterly useless at another.
MH: So, it might sound cliché, but best way of building trust is to consistently deliver on what you said you were going to deliver on. If you’re an employee, that means doing your job. If you’re a manager, it means balancing the needs of your people with the needs of the company. For organizations, it’s also about designing systems that reinforce trust. That means making implicit promises — like fair, equitable and safe workplaces — explicit through policies and procedures. And when things go wrong, it means having mechanisms in place to put them right. It also means communicating…a lot.
BM: There's the accrual of trust is it's a very difficult thing to have happen, and it's almost like on a daily basis, that we're checking to find out is this organization that they still have my back. Is this still something that's mutually beneficial to me, and especially when significant events come up, whether they be crises, budget problems, new competitors, so on and so forth. People are worried they're going to get left behind and those moments are obviously important for reinforcing trust. But even on a day to day basis where everything seems to be fine, it's important that leaders are constantly on the lookout for whether or not there's an issue relating to that, because that's kind of how we experience it as humans. We need to be reassured — we need to have that reinforced on a regular basis.
MH: And if you do break someone’s trust, well it’s important to take ownership of that mistake
BM: I think the first thing is to understand that it has been lost and what that means, because there's also plenty of forms of trust violation that occur that it's one sided experience, like the person who was harmed really feels that quite viscerally, and the other party almost as oblivious to it. And so in an organizational sense, somehow having the capacity to appreciate that is really important, because without that, there's no opportunity for repairing trust.
MH: Repairing trust often looks the same as building it in the first place: consistently delivering on your promises over time.
BM: I think you can put in place strategies, policies, procedures. I like to think of them also as like social tools that create the conditions for trust to take hold, but in the end of the day, whether or not it does and how much it does, you can't dictate, because I can't force you to trust somebody. I can’t even force you trust me. I can try my darndest. There are certain strategies I can think about interpersonally — Ok, I'm going to be clear about my expectations, I'm going to be really reliable, I'm going to be on time — but in the organizational sense, we're doing this at scale now.
MH: And in today’s hybrid/WFH, digitally disparate world, even some of those peer to peer relationships become harder to nurture. So how do we decide who to trust at a distance? That’s where Bill’s concept of prismatic trust comes in.
BM: So clear light goes into a prism, and it all gets sorted out and filtered out into different rays, and we see the colors coming out the other side of it. Well, the same is true of networks. A whole bunch of information goes in, but there are certain mechanisms that allow us to refine certain aspects of the information and give us clear signals for things like trustworthiness.
MH: Think of it this way: in traditional relationships, we build trust based on personal interactions – people repeatedly delivering on what they say they’re going to deliver on.
But in today’s world — where we often work with people we barely know, across networks that span countries and industries — how do we decide who to trust? That’s what Bill and his team explored through a study of an investor trading platform called EZ Trade.
BM: What drew us to the context was the fact that it's a system designed to enhance trust.
MH: EZ Trade is like a social network for investors. You can follow other traders, chat with them, see how much money they made, and even automatically copy their trades — a feature called copy trading.
You might expect that if you’re going to blindly copy an investment, you’ll trust the people you actually know and have a relationship with, right? And, that did happen, but that’s not all that the researchers found
BM: And so over time, people come to be known for being good at certain things, and they attract followers, but not just the number of followers, the quality of the followers as well, because some of those people who are following you themselves are highly followed. And this is the measure of status that we used, to predict that the people who are really high status in the network would be the ones who attracted more copy traders.
MH: So in the absence of personal connection, people use status, transparency and social signals as shortcuts for trust. They look at who’s successful, who’s followed, who’s respected to copy trade. Now, as an organization, it doesn’t mean you have to go build a social network for your employees to foster trust with people they don’t know in your company. But it’s worth considering: What signals are you sending in your workplace about who and what is valued? How transparent are your processes? Are you building systems that make it easier for people to decide who and what they can trust?
BM: We talked a little bit about designing social tools for trust. So we came across this platform where it was from our perspective, pretty clear what they were trying to do was to perpetuate trust and create systems that were going to provide information on trust. Genies out of the bottle. We're in this online world, we're going to continue to have more and more of our lives and our careers and our organizations online. And there's great things that we can accomplish when we can really depend on people that are hard to find otherwise. So trusting at scale can be very powerful, but the risks are really enormous as well.
But it's important for people to understand that there are mechanisms for ascertaining trust, even when we don't have the ability to know people personally, and that, I think, is necessarily our future is collaborating with people that are really distant from us and relying on people that are really distant from us. Human beings are ingenious in figuring out how to trust strangers, But therein lies the paradox of that you open yourself up to harm, I think of it as an innately human thing. So it's not just something that's important in terms of running a business or any kind of organization. It's just how human society functions.
Musical interlude
MH: This has been Rotman Executive Summary, a podcast bringing you the latest insights and innovative thinking from Canada's leading business school. Special thanks to professor Bill McEvily
Join us next month as we chat with professor Dimitry Anastakis on what history can teach us about Canada’s current economic uncertainty.
If you’re just tuning in for the first time, check out some of our earlier episodes — we tackle everything from how to deal with burnout to whether AI can really be regulated.
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This episode was written and produced by Megan Haynes. It was recorded by Dan Mazzotta and edited by Avery Moore Kloss.
Thanks for tuning in.