The governance imperative of trust: Why boards must prioritise stakeholder confidence

TRUST is not just earned; it is governed. This governance imperative applies universally. From private corporations to State-Owned Enterprises, trust is the invisible currency that dictates whether an organisation thrives or collapses.

- NQOBANI MZIZI

It is the bedrock of reputation and the lens through which all governance actions are judged. Yet, for many boards, trust is spoken of only in the context of crises, not as a standing governance priority.

An organisation can meet every regulatory requirement, produce clean audit reports, and still forfeit stakeholder confidence. Why? Because trust is built not through compliance alone, but through conduct, culture and consistency. The governance challenge is to make trust a conscious, measurable and strategic outcome rather than a byproduct of other decisions.

Stakeholder trust is a strategic asset, influencing whether investors commit capital, customers remain loyal, employees stay engaged and regulators exercise discretion or impose sanctions. In King IV, trust is woven into the principle of stakeholder inclusivity, reminding boards that sustainable value creation requires both performance and legitimacy. ISO 37000 takes it further, framing ethical culture and organisational legitimacy as nonnegotiable governance outcomes.

Boards that neglect trust governance forfeit their licence to operate; not legally, but socially. Once lost, this licence is far harder to regain than any regulatory permit. The solution? Proactive governance.

Trust, though abstract, becomes manageable when broken into components. Take competence: the ability to deliver on promises and meet performance standards. Integrity shines when decisions are transparent, fair and consistent. Reliability is demonstrated through follow-through over time, not only when circumstances are favourable. Care is shown when organisations prioritise stakeholder interests, even at short-term cost. Each lies within a board’s remit through strategic oversight, executive accountability and ethical leadership. But how can boards translate these principles into action?