1. ETHICS AND/OR TRUST: HOW DO WE SOLVE THE CRISIS? PRESENTATION FOR THE CENTER FOR ETHICS EDUCATION AT FORDHAM UNIVERSITY OCTOBER 17, 2012

2. IN HONOR OF A TRUSTWORTHY MOTHER Patricia Duffy Hurley August 17, 1924 to October 16, 2012 32,233 days of a life that inspired trust.

3. CFTO VISION To expand the number of organizations that can legitimately be called trustworthy because they consistently demonstrate the values, practices and processes that warrant stakeholder trust.

4. CFTO ACTIVITIES Annual Summit Speaker Series Best Practice Groups Cutting-Edge Research Trust Measurement Diagnostics and Metrics Executive Education

5. Confident reliance on a person, group, or organization when there is uncertainty and risk What Is Trust?

6. THE PROBLEM Confidence in Business – Harris Poll

7. " Is insider trading part of the fabric?" "Jury Says Vivendi Defrauded Liberty Media" "Financier Is Sentenced To 110 Years For Fraud " "Fraud accusations threaten Burgundy's reputation " NEW YORK TIMES HEADLINES THIS SUMMER "A Calculated Deal In a Rate-Rigging Inquiry " "Regulators Charge a Futures Brokerage Firm and Its Chief w ith Fraud " "Olympus Says It Might Have Violated an Anti-Bribery Law " Copyright 2012 Dr. Hurley

8. PORTRAYING A CULTURE OF DISTRUST IN BUSINESS

10. WE’VE FALLEN A LONG WAY

11. THE MANAGEMENT OF TRUST People, companies and systems emit trust and distrust signals

12. TRUST SCORES RISE AND FALL Confidence changes

13. A FIVE PART SOLUTION Better regulation to reduce signals of distrust Change the conversation from ethics to trust Educate trustors to make better trust decisions Develop more trustworthy leaders Trustworthy leaders embed trustworthiness into the DNA of their organizations

14. ETHICS AND TRUST How many of you think about the degree to which you have ethical and unethical relationships in your life? How many of you think about the degree to which you have high or low trust relationship son your life? Ethics – First principles Integrity and honesty Fairness Benevolence and concern for others Virtue and moral precepts Is it possible to be ethical and untrustworthy?

15. Regulating Distrust Effective regulation can create standards that mitigate risk and distrust.

16. LowHighRisk Tolerance Situational Factors Trustor Factors LowHigh LowHighPower Adjustment LowHighSituational Security Not ApparentApparent ConflictingAlignedInterests Similarities Not DemonstratedDemonstratedBenevolent Concern LowHigh LowHighPredictability/Integrity Capability PoorGoodCommunication Distrusting Choice Trusting Choice The Decision To Trust Model

17. A MODEL OF THE TRUST/DISTRUST CHOICE Similarities Interests Benevolent Concern Capability Predictability/Integrity Communication Distrusting ChoiceTrusting Choice Not apparent Conflicting Not demonstrated Low Poor Apparent Aligned Demonstrated High Good

18. A MODEL OF THE TRUST/DISTRUST CHOICE Similarities Interests Benevolent Concern Capability Predictability/Integrity Communication Distrusting ChoiceTrusting Choice Not apparent Conflicting Not demonstrated Low Poor Apparent Aligned Demonstrated High Good

19. A MODEL OF THE TRUST/DISTRUST CHOICE Similarities Interests Benevolent Concern Capability Predictability/Integrity Communication Distrusting ChoiceTrusting Choice Not apparent Conflicting Not demonstrated Low Poor Apparent Aligned Demonstrated High Good

20. A MODEL OF THE TRUST/DISTRUST CHOICE Similarities Interests Benevolent Concern Capability Predictability/Integrity Communication Distrusting ChoiceTrusting Choice Not apparent Conflicting Not demonstrated Low Poor Apparent Aligned Demonstrated High Good

21. A MODEL OF THE TRUST/DISTRUST CHOICE Similarities Interests Benevolent Concern Capability Predictability/Integrity Communication Distrusting ChoiceTrusting Choice Not apparent Conflicting Not demonstrated Low Poor Apparent Aligned Demonstrated High Good

22. A MODEL OF THE TRUST/DISTRUST CHOICE Similarities Interests Benevolent Concern Capability Predictability/Integrity Communication Distrusting ChoiceTrusting Choice Not apparent Conflicting Not demonstrated Low Poor Apparent Aligned Demonstrated High Good

23. THE SCIENCE OF EMBEDDING TRUSTWORTHINESS IN ORGANIZATIONS

25. QUOTE TRUSTWORTHINESS FAILURE WHERE IN ORGANIZATION “Overwhelming volume”Capability Competencies Structure Core Processes “Lost culture of accuracy” “Focus on market share” “Removed analysts” “Waved procedures” Benevolent Concern Communication Alignment of interests Integrity Leadership Mission/strategy Communication Systems HR Systems Core Processes “IBG-YBG” SimilaritiesCulture

26. ORGANIZATION Similarities Interests Benevolent Concern Capability Predictability/Integrity Communication Stakeholders’ Decision to Trust

27. ORGANIZATIONAL PERFORMANCE AND TRUST MODEL The Decision to TRUST: How LEADERS Create High-Trust Organizations, Robert F. Hurley, Copyright © 2012 by Robert F. Hurley. All rights reserved. Copyright 2012 Dr. Hurley Leadership Systems (Planning, Reporting, Budgeting, Compliance, Reward) Selection and Management of People Other (Natural Environment, Investors, Government, Technology, etc. Values and Competencies Cooperativeness of Relationship 1623547 1. Trustworthy Leaders: What’s Required for the Next Generation 2. Effective Trust Repair 3. Measuring Organizational Trust and Trustworthiness 4. HR and L&D in Trustworthy Organizations 5. The Regulation of Distrust and Building High Trust Firms 6. Moving from Compliance to Deep Embedding of Ethical Cultures 7. A Multi-stakeholder Communications Approach to Building Trust