Following its involvement in one of the world’s worst-ever money laundering scandals, Danske Bank’s new CEO, Chris Vogelzang, has vowed to “strengthen the bank’s defense” and work to restore trust.
I asked members of our Trust Council to share some advice they might have for Chris Vogelzang.
Donna Boehme, our “Lion” of compliance weighed in first, offering the following observations:
To rebuild trust and establish a culture of ethical leadership is a huge undertaking that takes years, not days, and requires the advice and coaching of experts, not just PR Wizards of Smart. One area the experts would focus this company on would be the entire system of “incentives” which has an outsized effect on culture and business decisions, as demonstrated so vividly by Wells Fargo and its fake accounts scandal. Danske might want to look at the leading edge examples being set by a number of companies In this arena.
It is also encouraging that the CEO has brought a compliance team together that has AML and other compliance SME. But if he wants that team to be successful, he must ensure that it has independence, empowerment, line of sight, seat at the table and resources adequate to do the job well. Gone are the days when reputation and brand can be entrusted to an in-house legal team with no legitimate compliance SME (earned in the trenches) and lacking the positioning and authority to do the job.
Stephen M.R. Covey shared the following thoughts:
First, “you can’t talk your way out of a problem you behaved your way into.” In other words, the only way to restore trust here will be through actions — behaviors — not merely words (although words can be helpful to signal what you’re going to do). Key behaviors to restore trust here include: Confront Reality (acknowledge it), Practice Accountability (own it), Right Wrongs (make it right as best you can), Clarify Expectations (tell people what you’re going to do to re-earn their trust), and Keep Commitments (do what you say you’re going to do).
Second, trust in the marketplace is an extension of trust in the workplace. It’s inside out. So in order to restore trust with customers, it will be vital to also restore trust with your own people. Too often organizations who have lost trust in the marketplace focus primarily (sometimes almost exclusively) on the customer/market trust and don’t recognize that they also need to be rebuilding internal workplace trust. Without the workplace trust, it’s hard to sustain market trust. Indeed, it’s incongruent.
Third, while building/rebuilding trust is definitely an inside-out process, starting with each leader and with the leadership team, it’s also vital that the process move out to the organizational level where they can better and more appropriately align systems and structures to ensure they build trust the right way. Some of these systems/structures may have been misaligned in the past and may have contributed to the challenge.
There’s a lot more they need to do but those are just a couple of thoughts.
I’ll add a few more observations to the sage advice provided by Donna and Stephen.
The concept of rebuilding something implies that it was built before. There is one question that the new CEO must answer before a trust-building strategy can be developed. What exactly did we trust our bank to do in the past that we are currently failing to do?
While compliance plays a role in elevating trust, it must first come as a directive from the top. If the Board of Directors doesn’t understand or support the importance of creating a long-term strategy to elevate trust, the leadership team will be ineffective. The Danske Board currently consists of five committees: audit, compliance, nomination, remuneration and risk. I would suggest adding a sixth called “trust” and immediately calling in some trust subject matter experts to assist in outlining this critical trust-building strategy.
And speaking of strategy, whether post crisis or proactive, trust can never be delegated, yet this is what we see time and time again. It is not a legal or PR “tactic,” but rather an outcome of an intentional trust “plan” that leadership executes, practices and reinforces daily. In other words, trust “talk” must be followed up with action.
Perhaps Danske Bank will someday become the industry role model in building trust. After all Denmark, with its high level of trust, should demand nothing less.
A version of this post first appeared on the Trust Across America blog and is published here with permission.
Comments are closed for this article!