Trust underpins the currency of commerce and chief legal officers (CLOs) have always had a role in developing trust through the development of ethics and compliance frameworks within their organizations. Today, trust continues to be a fundamental imperative and a growing factor for success—not only for companies broadly but for a CLO’s ability to be a strategic member of the senior executive team. As the importance of trust in the corporate setting grows, there is good news: trust can be built.

There are five elements CLOs can address as they work to cultivate both organizational and individual trust:

  • Physical trust Employees put their trust in workplace safety, customers place their trust in an organization whenever they visit a store and communities trust a business to operate in an environmentally sound manner. Environmental, health and safety teams may report up to the legal function, thus a CLO’s oversight of appropriate regulations and codes can help build and maintain physical trust. Even if environmental, health and safety don’t report into the CLO, a CLO can be part of the team that works to help maintain physical safety in situations where the organization’s duty of care applies.
  • Financial trust Financial trust accrues to organizations that serve their internal and external stakeholders’ economic and financial concerns, and the CLO can help to build financial trust by collaborating with the CFO and CHRO to protect these interests. Financial trust can also be built through a range of business agreements— for example, new hires build trust when their job offers are honored, customers build trust when the organization stands behind its offerings and suppliers build trust when the organization honors its debts and obligations. In each of these situations, it’s often the CLO and his or her team who play a key role in establishing that financial trust via contract management, regulatory compliance efforts and other externally facing legal efforts.
  • Digital trust Stakeholders expect an organization to take the security of their information seriously. While this may seem like an issue solely for the IT team; if a data breach occurs, the CLO is often the one that deals with the legal and regulatory consequences. The CLO is also the one who works with insurance companies in the wake of a breach and keeps the board of directors updated on what the organization is doing to comply with data privacy regulations, mitigate legal risk, and prevent events such as cyberattacks and unauthorized data disclosures. Thus, it is important for the CLO to work closely with the IT team on issues of information security and digital trust building.
  • Emotional trust Emotional trust occurs when stakeholders believe they and the organization are on the same side. For employees, emotional trust can form when their efforts are welcomed and accepted among colleagues. Suppliers can gain emotional trust when they work collaboratively with an organization to solve problems or build innovative solutions. Consumers may attach emotional trust to a company with products aligned with their own ideas of what the products should be. Even regulators may develop emotional trust for an organization that is responsive to their requests. Many CLOs own their organization’s environmental, social, and governance (ESG) goals, giving them considerable latitude in building up emotional trust. Even for CLOs that don’t own ESG, a focus on diversity, equity and inclusion efforts and privacy initiatives can build emotional trust, as can clear, concise and transparent communications both internally and externally.
  • Ethical trust Ethical trust comes from doing not just what’s legal, but also what’s “right.” Investment opportunities, product tradeoffs, sales goals and the treatment of workers are all examples of situations where ethics can come into play. To stakeholders, choices that organizations make when at a crossroads are strong indicators of their brand and intent. CLOs are in a unique position to advise on the ethics of business decisions, not least because the American Bar Association’s Model Rules of Professional Conduct opens the door for them to do so. Whether it’s to acquire a competitor, enter a new market, discontinue a product line, or any of a number of other strategic business decisions, CLOs can help colleagues navigate the ethics considerations and move forward in a way that stakeholders can trust.