I went to a very interesting dinner this week. Hosted by a senior banker, it included a number of other senior banking folk, several top consumer advocates, business leaders, a few social enterprises, PR advisors and a smattering of academics. The question: how might trust in banks be restored?

It's a critical question for all of us. But first we had a search for scapegoats. First it was greed and arrogance. Bear in mind, whenever people use these words, they always mean other peoples' greed and other peoples' arrogance, never their own. Then there was the old Ayn Rand trope that what created the banking failure was too much regulation which fostered a tick-box mentality and stopped people from thinking creatively and independently. Well I'm sorry, but manipulating LIBOR is creative and independent thinking by anyone's measure.

It would have been comforting to be able to ring-fence investment banking and say that it was chiefly to blame, that the reputation of retail banking had been damaged by association. Since we'd all like to trust our banks - need to trust our banks - we'd like to believe that. But alas, PPI and the mis-selling of derivatives to SMEs forecloses that avenue of escape from painful truths.

The Economist summed it up last week: Culture flows from structure. The structure of these banks is wrong and needs to be changed. The banks are too big, remuneration is out of proportion. Knowledge that banks have is so siloed that half the time it doesn't do the good that it might. People are accountable either to too many people or not enough.

And there's way too much silence - in the workforce and around the boardroom table. This was the gist of my TED talk at TEDGlobal last month and it remains a critical leadership issue. It's also one reason why the Centre for Effective Dispute Resolution has been training leaders and teams of executives how to have 'difficult conversations' so that awkward truths emerge early and get dealt with before they escalate to create full scale crises. In all my years of running businesses, I've learned that the truth about a company is always in there somewhere. Hire smart people and yes, they will know what's going on and they'll know what's wrong. The challenge is to create the climate and teach the skills so that those truths can be articulated and heard.

And that pertains to boards too. Most are still too chummy, too dependent on the CEO and too keen to please. Until we hear a lot more vigorous debate - well managed, structured and constructive conflict - and until we see some obvious and profound structural changes, restoring trust will remain talk when the public craves action.

This Blogger's Books from

Willful Blindness: Why We Ignore the Obvious at Our Peril
by Margaret Heffernan

How She Does It: How Women Entrepreneurs Are Changing the Rules of Business Success
by Margaret Heffernan