American businesses and corporate executives are faced with a serious problem: the loss of public confidence. Public criticism, increased government controls, and growing expectations for improved financial performance and accountability have accompanied this decline in trust. Traditional approaches to corporate governance, typified by agency theory and stakeholder theory, have been expensive to direct and have focused on short-term profits and organizational systems that fail to achieve desired results. We explain why the organizational governance theories are fundamentally, inadequate to build trust. We advance a conceptual framework based on stewardship theory characterized by ''covenantal relationships'' and argue that design of governance mechanisms using a covenantal approach is more effective in building trust in organizations. A covenantal relationship is a specialized form of a relational contract between an employee and his or her organization. We argue that regardless of incentives and control mechanisms carefully designed through contractual mechanisms, in the absence of covenantal relationships it is extremely difficult to build trust within organizations. We propose that organizations are more likely to build trust -both at the organizational level and at the interpersonal level -when they create reinforcing and integrated systems that honor implied duties of ''covenantal relationships.''

love, forgiveness, trust, ethical leadership, caring,

stewardship, leadership, trust, ethics,

No abstract

PurposeThe purpose of this research is to propose and empirically test hypotheses concerning the influence of leadership behaviors on interpersonal perceptions of trustworthiness.Design/methodology/approachSurvey research is employed to assess the dimensions of leadership behavior and dimensions of trustworthiness and to determine the relationships among the leadership behavior dimensions and trustworthiness dimensions.FindingsFactor analyses support previous research advocating three dimensions of leadership behavior (relationship development, resource utilization, and image management) and three dimensions of trustworthiness (ability, benevolence, and integrity). A structural model (LISREL), testing the relationship among the three leadership behavior dimensions and the three trustworthiness dimensions, shows that image management influences perceptions of all three dimensions of trustworthiness, and relationship development influences the benevolence dimension of trustworthiness. Using analysis of variance, the research finds that younger individuals view leaders as being more trustworthy than older individuals do.Research limitations/implicationsThe limitations of this study include a survey research methodology and a sample of university students.Practical implicationsThere are consequences to leaders' actions. This study shows that perceptions of trustworthiness can be influenced by leadership behavior.Originality/valuePast research suggests that trustworthiness is an important component of a successful organization. This research supports the hypothesis that leadership behavior affects perceptions of trustworthiness, which is important to researchers and managers interested in how the behaviors of leaders influence other areas of the organization.