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How do you know when to trust an organization, individual or piece of news? And how do you regain trust from customers, employees or colleagues when your own trustworthiness has been called into question?

Itโ€™s not always easy, says Wharton Business Law and Ethics Professor Kevin Werbach, an authority on blockchain technologies, AI, and cybersecurity. Werbach โ€“ author of the riveting 2018 book, โ€œThe Blockchain and the New Architecture of Trustโ€ โ€“ helps organizations and individuals understand the risks of fraud, lies and deceptive practices due to new technology. Below, he shares some sage advice on how to cultivate and secure trust.

โ€œWe are actually facing two crises: trust and trustworthiness. The political and informational distortions undermining confidence in institutions are terribly important problems. However, business leaders should focus first on the other side of the equation. After so many scandals, why should customers, employees and other stakeholders find them trustworthy?

โ€œThe way to prove you have someoneโ€™s interests at heart is to act when you donโ€™t have to, or when itโ€™s costly in the short term. When I polled my students about responsible corporate behavior during the pandemic, several spoke of how their employers stepped up early to guarantee jobs, adjust work requirements and implement safety measures. They didnโ€™t wait until governments forced them to or their competitors shamed them into it. That earned those firms goodwill to cash in later, if needed. As a contrary example, the investing service Robinhood didnโ€™t fully disclose that it was directing customer orders to hedge funds paying it, until regulators intervened. Later, when Robinhood froze trading due to a spike in volatility of โ€˜meme stocksโ€™ like Gamestop, users rebelled. They had no reason to believe Robinhood was acting for their benefit.

โ€œConsistency matters here: itโ€™s how firms demonstrate integrity. As does taking responsibility. With the rapid growth in data analytics, itโ€™s easy to blame a โ€œmutant algorithm,โ€ as UK Prime Minister Boris Johnson did when a controversy erupted over college admissions scores. It soon became clear the problem wasnโ€™t the algorithm. It was the governmentโ€™s decision to use it, and to design it with objectives that virtually guaranteed the result.

โ€œExciting new technologies such as blockchain can limit the scope of distrust by providing tamper-resistant guarantees of information. However, trustworthinessโ€”and trustโ€”still require a human dimension.โ€

Grappling with Trust and Trustworthiness? Read on. was last modified: February 13th, 2023 by Whitney Jennings