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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?

It’s not always easy, says Wharton Business Law and Ethics Professor Kevin Werbach, an authority on blockchain technologies, AI, and cybersecurity. Werbach – author of the riveting 2018 book, “The Blockchain and the New Architecture of Trust” – 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.

“We 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?

“The way to prove you have someone’s interests at heart is to act when you don’t have to, or when it’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 didn’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 didn’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 ‘meme stocks’ like Gamestop, users rebelled. They had no reason to believe Robinhood was acting for their benefit.

“Consistency matters here: it’s how firms demonstrate integrity. As does taking responsibility. With the rapid growth in data analytics, it’s easy to blame a “mutant algorithm,” as UK Prime Minister Boris Johnson did when a controversy erupted over college admissions scores. It soon became clear the problem wasn’t the algorithm. It was the government’s decision to use it, and to design it with objectives that virtually guaranteed the result.

“Exciting new technologies such as blockchain can limit the scope of distrust by providing tamper-resistant guarantees of information. However, trustworthiness—and trust—still require a human dimension.”

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