Last week, world leaders in business and politics gathered at the World Economic Forum in Davos, as they do annually, to hobnob and wax on the most pressing issues of the year ahead. This year, fitting for this newsletter, the meeting convened under the theme “Rebuilding Trust.”
“Increasing division, heightened hostility, and a surge in conflicts are defining the current global landscape,” WEF founder Klaus Schwab wrote at the start of the convention last week. “Rebuilding trust in our future is paramount. The question is where to start, given today’s complex circumstances.”
In the past year, executives have frequently told me that the circumstances facing current leaders are more complex than those that confronted leaders in bygone decades—even though war, a grueling economy, and misinformation are common antagonists to global business.
The difference between now and then is twofold: first, the increased power of technology to amplify those age-old problems; and second, as a consequence of the first, the rise of interested stakeholders that each leader has to satisfy.
The first point is why this year’s Davos appeared to many people to be more a referendum on AI than a clinic on trust. The second point is perhaps why academic Walter Russell Mead wrote for the Journal that this year’s WEF meeting marked the “humiliation of Davos man.”
“The meeting’s ‘Rebuilding Trust’ theme acknowledges that something has gone wrong,” Mead writes, arguing that “people aren’t losing trust in their leaders because disinformation has muddled their brains. They are losing confidence because they sense that the establishment’s approach to the chief problems of the day isn’t working.”
“This isn’t, at its core, a crisis of trust. It is a crisis of competence,” Mead says. That argument isn’t wrong, although it’s mostly a rhetorical flourish that shifts focus from the symptom of a problem—growing distrust—to one of its causes.
In the business world, few leaders are equipped to deal with the competing demands of multilateral stakeholders. Despite the Business Roundtable’s official change of allegiance, shareholders—and their demand for profits—still reign supreme in corporate decision-making, and executive incentives that reward short-term gain over long-term improvements are still the norm.
But that’s not to say Davos man doesn’t know it. Even Schwab, in the rest of his opening memo, laments that leaders “still cling to outdated solutions” and that future problems need “holistic” solutions. Schwab goes on to say that “open, transparent conversations” will help leaders find their way out of that quagmire.
That suggestion might seem ironic or even dubious from the founder of an institution that facilitates world leaders cloistering themselves away in Davos. For a touch more irony, one of the event’s panels on building trust through transparency was mediated by Bronwen Maddox, chief executive of think tank Chatham House, famous for its rule of secrecy.
Whether Davos itself is too outdated to birth the “holistic” solutions is up for debate. As I wrote last month, there is a role for secrecy in building trust among leaders. So, in the meantime, if you know someone who is curious how today’s executives are tackling the issue of trust in their own industries, you might suggest they sign up for this newsletter.
Eamon Barrett
eamon.barrett@fortune.com
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