Creating a Virtuous Enterprise

Trust is confidence in the right use of power. The consequences of a break in trust are swift destruction in the value of the firm, perhaps destruction of the firm itself. It can ripple through to destroy value in a whole sector or the economy overall.

Mere compliance is not sufficient. Laws, regulations and regulatory agencies come AFTER a break in trust – after significant damage is done. The regulations are an attempt to prevent something that bad from happening again. Yet, the potential for abuses of power and breaches of trust remain.

It is up to the board of directors, as part of their fiduciary risk management duty, to be sure their organization is clear about right and wrong uses of power.

www.vostinato.com lays out some of the issues and a path for the board to create habits of virtue in their organizations. It is developed by Dave Rader. Alistair Davidson and he consult in this area.