A Letter to the Fellows: Trust Through Transparency
While my tenure as FLF Executive Director has been brief, I have no doubts that we have a great deal of wonderful work to do together. Many of you have shared thoughts about the journey you’re undertaking as Fellows. And unsurprisingly, the themes that you’ve reflected are those of transparency, transformation, and?trust.
On the last, I’ve always loved the Earnest Hemingway approach: “the best way to find out if you can?trust?somebody is to?trust?them.” I’ve begun to see the extent to which everyone at the FLF is willing to take little leaps of faith in hopes of achieving big impact.
But back to the notion of?trust,?years ago a professor of mine shared an equation that has stayed with me. He called it the "Trust?Quotient." Unlike other definitions I’ve seen in finance, he used the product of Credibility times Intimacy, divided by Risk, or C*I / R. As we know, credibility and risk are common notions in financial markets.
Over the past several decades, the first part of the numerator has been declining, the second part has been all but absent, and the denominator, it seems, has been rising inexorably. In other words, the Trust?Quotient has been declining for years. Not okay.
So, in thinking about how the FLF can help reverse that trend and increase the industry's Trust Quotient, we?can start by working hard to nurture an ethos of trust within our own organizations. How, you might ask? By leveraging the tool of transparency.?
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Transparency leads to greater insights, better decision-making, more efficiency, higher inclusiveness, and enhanced access…and most importantly, more?trust.?
Hemingway also said that “Now is no time to think of what you do not have. Think of what you can do with what there is.” Well, there is an awful lot we have in the FLF, and an awful lot we can do together. And just imagine what we can do with greater trust in the financial markets!
From Strength to Strength,?
Erika Karp, Executive Director, Aspen Institute Finance Leaders Fellowship