President Barak Obama referred in his inaugural address to the necessary trust between government and the people. The issue of trust—in human relationships and in the global economy—has become central to the way the world should work. Powerful voices are saying so.

Take, for instance, William J Amelio, President and CEO of the computer manufacturing giant Lenovo. In an interview for the World Economic Forum in Davos, he says, ‘I believe we will emerge from this [economic] crisis by working together and by working on restoring the lost trust and transparency that led to this crisis…. We need to absolutely avoid things that fuel distrust… a disintegration of trust led us to the current economic crisis…. The best-performing companies are those that have transparent and honest operating principles and abide by them… A strong audit function ensures your values and principles are practiced consistently. The basic principle is one of trust—of demonstrating at all levels of your organization why you can and ought to receive the privilege of trust from others.’ He concludes by saying, ‘Our best leaders at Lenovo are those that have a solid moral compass…. take the long term view, and treat their fellow employees with dignity and respect.’

Then under the main headline, ‘A loss of trust, integrity and common sense’, Keith Farman writes in the Letters page of The Times, London (24 January 2009): ‘Without trust there can be no free, fair and stable trade. The current crisis in the world financial system is ascribed to a lack of confidence but in truth the cause is deeper—no less than the loss of trust.’ He continues that, ‘The exchangers of mankind’s goods—material and financial—must recover their own sense of honour, moral principle and integrity upon which every fair trade is based…. Without a general ethos of self-control, personal integrity and honesty, Main Street, Wall Street and our British equivalents will not earn the trust they should deserve.’ He concludes by saying that the City (the financial heart of London), ‘needs to embrace the deeper philosophy: that ethical principals apply equally to the generation of wealth, not merely its disposal.’

It was unfortunate that a ‘strong audit function’, referred to by Amelio, was missing from the Indian outsourcing company Satyam—a name that means trust in Sanskrit. The company’s founder resigned recently after confessing to fraud in the company’s accounting; he has, allegedly, artificially inflated the balances by $1 billion. The scandal has been dubbed India’s Enron. Questions are now being asked why the company’s auditors, PriceWaterhouseCoopers, never spotted the fraud.

A deeper question also lies in what is meant by trust. As Nick Spencer points out in his excellent booklet Rebuilding trust in business (Grove Books), there are two broad components of trust. The first is the contractual basis: the written agreements that we sign between individuals and organizations, covering things like employment, purchasing and financial contracts, and adequate accounting and auditing procedures (so lacking in the subprime mortgage market and subsequent banking scandals), and which are backed up by the rule of law. Secondly, there is the covenant basis of trust: the promises that we make to each other and are dependent on individual honesty and integrity.

Writing in the Credo column of The Times (24 January 2009), Britain’s Chief Rabbi, Sir Jonathan Sacks, says: ‘There is a fundamental difference between contracts and covenants. In a contract, two or more individuals, each pursuing their own interest, come together to make an exchange for mutual benefit. When we pay someone to do something for us, implicitly or explicitly we make a contract.’ He continues: ‘A covenant is something different. In a covenant, two or more individuals, each respecting the dignity and integrity of the other, come together in a bond of mutual responsibility to do together what neither can achieve alone. It is not about interest but about loyalty, fidelity, holding together when events seem to be driving you apart. A covenant is less like a deal than like a marriage: it is a moral bond.’

Caux Initiative for Business, the global programme with which I am associated, tends to focus more on the Chief Rabbi’s and Nick Spencer’s second definition of trust: the covenant basis; the need for honesty and integrity in private and public life, the freedom from exploitation or greed, as the human basis for trust, and which make us trustworthy as individuals. But there is also the recognition that, venal and cruel human nature being what it is, we all fall short of the ideal. So forgiveness—both seeking and giving it, even in utterly excruciating circumstances—also has to be central to notions of trust building. Without it cycles of hatred and revenge cannot be broken.

Finally there is, of course, the national motto of the USA: ‘In God we trust’. The phrase is even printed on the nation’s currency, though we have too often made a god of the bank notes and coins on which the phrase is printed. This has got us into a lot of trouble. As Paul of Tarsus reminds us, ‘The love of money is the root of all evil.’ This has been certainly true in the global banking and economic crisis. But it has fundamentally been an issue of misplaced trust.

Yet building trust between individuals and between groups is essential to creating the partnerships, coalitions and cooperation needed to solve the great global issues—climate change, sustainable development, economic and social justice and the needed partnership of civilizations.

Michael Smith is the author of ‘Trust and Integrity in the Global Economy’ and a coordinator in the UK of Caux Initiatives for Business.