Deposits and deficits: The economics of trust in leadership

It rarely happens with a bang. More often, it is a slow erosion. A leader walks into a meeting and senses the energy has changed. Ideas are thinner, feedback is muted, and the once vibrant flow of honest dialogue has evaporated. Performance numbers may still look solid, but something deeper is shifting. That “something” is trust, an invisible currency that, once depleted, leaves leaders with loyal titles but disengaged people.

Trust is one of the most fragile and powerful forces in leadership. It builds slowly, through consistent choices and genuine care, yet it can fracture in a moment of misalignment. Research by Edelman’s Trust Barometer shows that when employees trust their leaders, they are 70 percent more engaged, 50 percent more productive, and 40 percent more likely to stay long-term. But when trust wanes, performance doesn’t collapse immediately; it decays quietly until the organisation finds itself in cultural debt it can no longer pay off.

The most dangerous part? Leaders often don’t notice the trust deficit until it’s too late.

In my years consulting with executives and studying leadership psychology, I have seen how trust deficits form in subtle ways. It’s rarely a dramatic scandal or public betrayal. More often, it’s the leader who promises transparency but withholds critical information “until the time is right.” Or the manager who preaches collaboration yet makes all the final decisions in a closed office. These incongruences between words and actions become micro-fractures in trust.

I once worked with a fast-growing technology company whose founder was celebrated as a visionary. He constantly spoke of empowerment and innovation, yet he routinely vetoed product ideas without explanation. Over time, his senior team stopped bringing him bold suggestions. They delivered safe, incremental improvements instead. The company didn’t collapse overnight; in fact, revenues kept climbing for a while. But the innovative edge dulled, competitors outpaced them, and by the time the leader recognised the issue, the talent pipeline had dried up. The organisation had quietly bled trust and, with it, its future.

A senior leader I once advised believed her team admired her decisiveness. She prided herself on taking control during high-stakes moments. Yet in 360-degree feedback, the phrase that kept surfacing was “She doesn’t listen.” What she thought was strong leadership was, to her team, a signal of mistrust in their capability. She had built performance compliance but eroded relational confidence.

Neuroscience backs this up. Studies show that when employees perceive fairness, integrity, and care from leaders, their brains release oxytocin, a hormone that fosters connection and risk-taking. But when they sense deception or inconsistency, cortisol spikes, activating fight-or-flight instincts. In other words, trust literally changes how teams think, act, and create. Trust isn’t just a soft skill. It’s a performance accelerator—or a silent killer.

So, how can leaders repair or prevent the trust deficit? The work is less about grand gestures and more about deliberate, everyday practices.
Start by aligning promises with behaviours. If you commit to an open-door policy, don’t just leave your door physically open; be mentally and emotionally available. If you advocate for work-life balance, demonstrate it by modelling boundaries yourself. Integrity is the alignment of message and method, and people are far more attuned to what you model than to what you declare.

Next, embrace what I call vulnerable transparency. Leaders often fear that admitting uncertainty will make them appear weak. But research shows the opposite. Vulnerability builds credibility, and credibility builds trust.

Another practical step is to create consistent rituals of listening. This could be monthly “pulse” meetings where team members speak first or structured listening rounds where leaders don’t respond; they only record. The point is to make listening a discipline, not an afterthought.

Finally, leaders must act swiftly on broken trust. If an error or oversight compromises confidence, acknowledge it directly and repair it visibly. Silence in the face of mistrust is the loudest statement of all. A manufacturing executive I coached once mishandled a major safety concern by delaying communication. When the truth eventually came out, employees felt betrayed. To his credit, he didn’t minimise the failure. He called an all-hands meeting, apologised, and outlined concrete safeguards moving forward. It took time, but his candour eventually rebuilt confidence.

Where might there be a gap between what I say and what I do?

When was the last time I admitted uncertainty to my team?

Do my people feel safer speaking the truth to me, or staying silent around me?

If I lost their trust tomorrow, what would it take to earn it back?

This week, choose one relationship in your leadership circle where trust feels strained or perhaps neglected. Don’t wait for a crisis. Initiate a conversation that asks, “What do you need from me that you’re not getting right now?” Then listen without defensiveness. Take one concrete step to act on what you hear. Trust won’t be rebuilt in a single moment, but it always starts with one courageous exchange.

Trust, after all, isn’t a destination. It’s a daily deposit. Leaders who make those deposits consistently will never have to fear a deficit. And the ones who don’t may one day realise they still hold authority but no longer hold their people.

About the author:

Dr Toye Sobande is a strategic leadership expert, executive coach, lawyer, public speaker, and award-winning author. He is the CEO of Stephens Leadership Consultancy LLC, a strategy and management consulting firm offering creative insight and solutions to businesses and leaders. Email: contactme@toyesobande.com