“Henry, the investor, wasn’t keen on accepting a stockbroker’s invitation to share a taxi – a sales pitch for a whole mile, he thought. He was wrong. The stockbroker neither mentioned his firm nor any stock. He merely unknotted his tie and stuffed it in his jacket pocket. “It’s not my favourite,” he said, “but my son chose it for my birthday, so, I have to wear it.” He continued: “My boy’s ten. That’s about the age when sons suddenly realise their fathers are not superhuman after all. Mine thinks I’m a loser.” One mile later, Henry had decided that he quite liked this stockbroker.” – The Trust Mandate: The behavioural science behind how asset managers REALLY win and keep clients. Brodie & Harnack, 2018)
Variations of the old chestnut – trust takes years to build but can be destroyed in seconds – have been around for decades. So it might come as a surprise to learn that there is no scientific evidence to support it. Indeed, science has revealed that trust is not something to be built and destroyed at all — trust is two things to be built and destroyed. Continue reading
One much-discussed indication of a firm’s good governance is hiring and promotions free of nepotism[i], cronyism or any other form of favouritism. Yet, despite the growing importance stakeholders attach to the ‘G’ in ‘ESG’, many organisations, both public and private, struggle to change their ways. Evidence remains of advancement based on family, nationality, language, politics, religion, alma mater and, of course, gender and ethnicity.
The consequences of unfair patronage for the subsequent performance of the patron and their protégés are varied, and (annoyingly) not always negative. However, the impact on everyone else in the organisation, is unambiguously bad.