Trust, Institutionalization, & Corporate Reputations: Public Independent Fact-Finding from a Risk Management Perspective

It turns out that Adam Smith was right. 2 As communism and associated command economies have come tumbling down, there is widespread agreement that market economies are the means by which wealth is produced.3 Given this point, what features are required in the building of a I KENNETH ARROW, THE LIMITS OF ORGANIZATION 23 (1974)."More than two decades ago, Kenneth Arrow suggested that 'virtually every commercial transaction has within itself an element of trust' and further, that'much of the economic backwardness in the world can be explained by the lack of mutual confidence.'"William A. Galston, Trust-But Quantify, PUB.INTEREST, Winter 1996, at 129, 129. 2 See generally ADAM SMITH, WEALTH OF NATIONS (1776).By preferring the support of domestic to that of foreign industry, [the owner of capital] intends only his own security; and by directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.Nor is it always the worse for society that it was no part of it.By pursuing his own interest he frequently promotes that of the society more effectively than when he really intends to promote it.I have never known much good done by those who affected to trade for the public good.Id. at 400.