Credibility is the foundation of leadership (Kouzes & Posner, 2011). People will voluntarily and cheerfully follow their leaders if they have faith in the people who lead them. Credibility is about how leaders gain the trust and confidence of their subordinates. It concerns what people demand of their leaders as a precondition to freely giving their hearts and minds to a common cause. It is also about the actions leaders must take so as to strengthen their constituents’ commitment.

The Problem

Since the last three decades, faith in organizations and leaders have started to fade away, and trust, the key element of credibility has taken a nosedive. No single event explains the whole decline, but a lot of people point the finger at Enron as the beginning of the fall. WorldCom, Tyco, Fannie Mae, other corporate accounting scandals, and illegal trading in mutual funds confirmed the suspicions of many about corporate greed, with persons like Bernard Madoff and Calisto Tanzi of Italy’s Parmalat only reinforcing these fears (Umar, Gungormus, & Kuzey, 2017). Sex scandals surfaced in churches (CIASE, 2021), as well as in the houses of parliament and statehouses. A housing and mortgage crisis in the United States, with a corresponding collapse in the financial markets, set in motion a prolonged economic recession that had the potential for bankrupting countries around the globe (FCIC, 2011). Millions lost their jobs; millions lost the roof over their heads; millions watched helplessly as the value of their retirement savings dwindled or disappeared. Adding to the anger of ordinary people was the fact that once-powerful organizations were given government bailouts while at the same time paying massive bonuses to their top executives (FCIC, 2011; Man and Ciurea, 2016; Umar et al., 2017).

To worsen the situation, in the recent past, environmental disasters have shattered entire populations and cost jobs in already unstable economic countries (Ritchie and Roser, 2021). In addition, the politicians on the campaign trail state publicly in their political billboards that their adversaries were liars, as opposed to offering answers that might help. The contagion effect was that public trust in all politicians weakened (Ikhariale, 2018). People are growing more reluctant to have confidence in their co-workers and their neighbours, especially in highly diverse organizations and societies where people are unaccustomed with the standards and expectations of their teammates.

Why Credibility Matters

Credibility matters influence employee levels of organizational commitment. According to Covey (1992), a high level of commitment generates an environment of cooperation and collaboration whereby leaders and constituents gain from open communication, benevolent interaction, and harmonious good organization thus producing a dedicated win-win performance bond. “Trusting other people encourages them to trust us; distrusting others make them lose confidence in us” (Kouzes and Posner, 2011, p. 106). In a nutshell, Leaders who demonstrate credibility create an organizational culture with increased morale, effective relationships, and high team performance.

Questions For Reflection

Leaders must accept that it is their responsibility to take the first step in earning back what has been lost and then further steps to sustain it.

• So, what can leaders do now to restore trust and confidence?
• What positive actions can leaders take to increase credibility over time?
• What can you do?

References

Covey, S.R. (1992). Principle-Centred Leadership. New York: Simon and Schuster, 31.

FCIC (2011). Final Report of the National Commission on the causes of the Financial and Economic Crisis in the United States. Retrieved from: https://www.govinfo.gov/content/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf (Accessed 18 July 2022).

Ikhariale, M. (2018). Politicians on the Campaign trail. Independent. Retrieved from: Politicians On The Campaign Trail – Independent Newspaper Nigeria (Accessed 18 July 2022).

Kouzes, J.M., & Posner, B.Z. (2011). Credibility: How leaders gain and lose it. Why people demand it. San Francisco. John Wiley & Sons, Inc.

Man, M., & Ciurea, M. (2016). Transparency of accounting information in achieving good Corporate Governance. True view and fair. Social Sciences and Education Research Review, 3(1), pp 41-62).

Posner, B. Z., & Kouzes, J. M. (1988). Relating leadership and credibility. Psychological Reports, 63(2), 527–530. https://doi.org/10.2466/pr0.1988.63.2.527

Ritchie, H., & Roser, M. (2021). Natural Disasters. Published online at OurWorldInData.org. Retrieved from: https://ourworldindata.org/natural-disasters (Accessed 18 July 2022).

The Independent Commission on Sexual Abuse in the Catholic Church (CIASE). Summary of the Final Report. Retrieved from: https://www.ciase.fr/medias/Ciase-Summary-of-the-Final-Report-5-october-2021.pdf

Uyar, A., Gungormus, A. H., & Kuzey, C. (2017). Impact of the Accounting Information System on Corporate Governance: Evidence from Turkish Non-Listed Companies. Australasian Accounting, Business and Finance Journal, 11(1), 9-27.