Interview with Jaap Winter, one of Europe’s leading experts on corporate governance on the importance of trust. He contributed to the first corporate governance rules in The Netherlands, “Code Tabaksblat”. He talks about the “Agency theory” and “substantial variable pay” arrangements for corporate executives, about acting in self-interest and how the wrong incentives create mistrust, which, in the words of Harvard professor Michael Jensen, would only led agents (executives) to “lie twice”. Trust is on the other side of a bureaucratic model, but trust is not enough, discipline is important. He reflects on the two models of INSEAD and London School of Economics professor Sumantra Ghoshal: the Dark-Calcutta model and the Spring-at-Fontainebleau model. Trust is easier to establish if there is proximity, something that often lacks with shareholders who are far away the company, almost anonymous. In that situation it is difficult to establish trust. There is a need for systems and controls, yet he is not in favor to answer to financial and other crises with even more rules and regulations, rather building an international reflective mission leading to a new corporate culture, like Siemens did after the bribery scandal that hit the company in 2008. For that you need discipline and a core element is trust, built through honesty and speaking “face-to-face”, “as if one would speak with a friend” (citing Exodus 33:11 where God speaks directly to Mozes).

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