Here is a top-level endorsement of a principal I have often voiced, most specifically in this popular post, Truth or Consequences? Beyond the Punishment Model.
“By the standards of the rest of the world, we overtrust. So far it has worked very well for us. Some would see it as weakness.” … Mr. Munger and Mr. Buffett argue that with the right basic controls, finding trustworthy managers and giving them an enormous amount of leeway creates more value than if they are forced to constantly look over their shoulders at human resources departments and lawyers monitoring their every move.
“We just try to operate in a seamless web of deserved trust and be careful whom we trust.”
Munger agrees with what I have called natural consequences, citing “late Columbia University philosophy professor, Charles Frankel, who believed ‘that systems are responsible in proportion to the degree in which the people making the decisions are living with the results of those decisions.’ …if you built a bridge, you stood under the arch when the scaffolding was removed.’”
–Warren Buffett’s business partner
Charlie Munger, Vice Chairman
Berkshire’s Radical Strategy: Trust – NYTimes.com.
Read more about the power of trust on this blog by clicking here.