Trust is at the heart of Platform Governance

Trust is at the heart of platform governance. Participants need to trust the concept of the platform, the platform itself and each other to successfully transact. So how can platforms best embed trust frameworks in their governance principles and operations?

After a year of economic turmoil and unprecedented uncertainty, the 2021 Edelman Trust Barometer reveals a serious deficit in trust towards institutions and leaders around the world. The COVID-19 pandemic has clearly put the four societal institutions that the study measures—government, business, NGOs and media—to the test. But perhaps the most surprising result is that business is now more trusted than government in 18 of the 27 countries where the study took place. Comparatively, business is today the only institution seen as both competent and ethical.

So, how can business leaders, and in particular platform leaders, step in and take the lead on change?

 

Participants need to trust the platform & trust each other

 

From a platform governance perspective, the process and practice of embedding trust and trustworthiness has long been a key concern for leaders. Trust is not just an elusive concept but holds different meaning and importance to diverse platform participants. And trust exists as a triangle connecting not just platform and user but also the users themselves.

Rob Chesnut is the author of Intentional Integrity: How smart companies can lead an ethical revolution and previously the Chief Ethics Officer & General Counsel at Airbnb, and also the former global head of Trust and Safety at eBay. He notes that the importance that platform organisations need to place on trust has increased significantly since the first platforms emerged and gained traction at the turn of the millennium.

Early online platforms were keen to employ an arms length approach and a ‘we are only a venue’ philosophy by encouraging participants to resolve issues amongst themselves. This often led to platforms being perceived as risky environments and sometimes attracted negative publicity when transactions went wrong.

Over time, as the importance of trust as a pillar of business governance was being better understood and valued, trust building features superseded the previous “laissez faire” approach. “I think if you are operating a platform, you are in the trust business,” says Chesnut. “You don’t have a product yourself. You’re in the business of helping people trust each other on your platform.”

 

Understanding trust requirements

 

The nature of a platform will determine the nature of the trust stakeholders’ needs because some activities need a greater level of confidence than others. And fostering trust between platform participants is often the most important aspect when helping all participants trust the platform itself.

BlaBlaCar, a unicorn (a privately held start-up with a valuation of $1bn), is a car sharing community of more than a hundred million members in 22 countries. Frédéric Mazzella, founder and president, notes that trust was a crucial ingredient in the success of BlaBlaCar. In fact, overcoming the trust problem was critical to unlocking the potential of a market perceived as so high risk that parents around the world have spent years telling their kids never to accept a car ride from a stranger.

The trust framework that BlaBlaCar has deployed manifests itself as an acronym: D.R.E.A.M.S. Each letter relates to the  information shared on the platform by members and each is distinct and vital. D is for declared. R for rated. E for engage. A for active. M for moderated and S for social.

‘Declared’ information includes a person’s name, photo and age. ‘Rated’ captures the number of ratings and the feedback score. ‘Engaged’ are the ways to get members interact and transact on the platform. ‘Active’ shows previous member activity. ‘Moderated’ indicates how a member profile has been verified (for example phone number or ID verified). And ‘Social’ shows how members are connected online, for example on Twitter or LinkedIn. The purpose of D.R.E.A.M.S is to provide a full picture of member usage. It means that someone with three years of membership, a personal photo, a verified telephone number, an up to date social media account and proof of dozens of trips is most likely a very reliable car sharer.

The D.R.E.A.M.S matrix is very successful. “You can see that the level of trust we’re able to achieve,” says Mazzella, “is a lot higher than the level of trust you have between neighbours or between colleagues”. The study Entering the Trust Age, run with 18,000 BlaBlaCar members in 11 countries, shows impressive trust levels within the community. 88% of respondents say they trust BlaBlaCar members with a complete profile. This result is close to the of 92% of respondents who trust their friends. And this number is … much higher than the 58% of respondents who trust their colleagues.

Mazzella also believes that transparency and clarity are crucial to promulgating trust throughout your ecosystem but the process can be time-consuming. “It takes time to create very, very simple and fair rules,” he says. And only then can you embark upon the equally difficult task of promulgating those rules though your team and community of stakeholders.

 

Different communities/platforms have different trust needs

 

Trust needs vary even within communities and are influenced by various conditions including location and local social norms, according to the co-founder of Glovo, Sacha Michaud.

Glovo is a fast growing unicorn providing on-demand courier service focused on food delivery. Founded in Barcelona in 2015, it has 1,500 employees and operates in 22 countries. The platform connects 45,000 partners, such as local stores and restaurants, with 50,000 active couriers who then service paying customers in a multi-stakeholder platform ecosystem.

“The reality is that there are different governance needs in different regions. Glovo’s in four continents,” says Michaud. “The realities in Ivory Coast compared to Barcelona compared to Kiev compared to Buenos Aires are very different.” Priorities differ in the the EU where “social protection and rights are fundamental for workers” whereas in the Ivory Coast or Latin American, it’s much more important that platform participants are paid, quickly and fairly, in cash after their contribution.

 

Balancing trust with the bottom line

 

Furthermore, trust priorities might also cause conflict within platform leader teams especially when revenue and righteousness collide. Rob Chesnut argues in favour of having a purpose beyond profits. And sometimes the right choice might mean a short-term hit to revenues but represent a profitable and successful long term choice in line with brand values.

Airbnb asked all of its Airbnb hosts to agree to a non discrimination policy to protect guests. Host would not be allowed to decline bookings on the grounds of gender, sexuality, race, religion or disability. 1.4 million property owners refused and were removed from the platform.

“We lost 1.1% of our users when we asked everyone to take a simple pledge that they wouldn’t discriminate based on the colour of someone’s skin or their race or nationality” says Chesnut. He acknowledges that it might represent an unacceptable loss within some businesses.  But for Airbnb it was culturally vital. The internal sentiment was that “we’re going to be better off standing for something in that kind of circumstance than chasing the numbers.”

Chesnut also argues that often it’s not a problem to carry your team or staff with you on difficult decisions. That’s because they want to be personally associated with a business operated with integrity. In fact, they will typically lobby internally for their platform to do the right thing.

 

Governance versus regulation

 

As platform businesses continue to grow in popularity and variety, issues of participant trust and brand integrity continue to dominate the minds of leaders concerned with platform governance. Internal codes of conduct, governance and trust frameworks, are often the basis upon which platforms self-regulate. This is an area where true platform leadership can make a real difference and where absolute ‘platform neutrality’ is an increasingly difficult position to take. Intentional integrity as an organisational capability is increasingly key to the long term success of platform organisations.

 

To go further 

To discover more insights from the Platform Leaders Event that took place on 18 November 2020, visit the Conference Page for the full list of speakers and agenda, and replay the full event.