Human societies, enterprises, and families depend, for their survival, on members sharing learned expectations about how to behave in support of the common good. We depend upon other people choosing to cooperate with us, yet we know their potential for behaving otherwise.

In no other species is individual development so much a matter of cultural learning. It requires training and modeling by family and community members, none of whose parenting or mentoring behavior can be guaranteed to develop precisely.

Other social animals have it easier, relying on one another’s instinctive behavior. Think of a herd of deer, a family of wolves, a school of fish, a flock of geese. As our behavior is so much more a matter of choices from a varied and constantly expanding repertoire, the risk involved in relying on others is greater than for animals that rely on each other’s instincts.Human individuals have to be prepared to doubt and verify one another’s conformance to expectations.

From the evolutionary point of view, a species, culture, or community whose members’ security depends upon their independent, opportunistic creativity and also upon restricting one another’s creativity is doubly vulnerable. Their genetic success (surviving to produce young who will also survive to reproduce) depends on an acute sensitivity to others’ failure to meet expectations. Vigilance, suspicion of betrayal, and reprisal are healthy for such a species, because trust is so vital to its survival.

Thus we should not be surprised that this species evolved strong emotional reactions (fight or flight) at the first sign of “betrayal” of trust. Contrary to what writers like Thomas Hobbes, Sigmund Freud, and Konrad Lorenz assumed, aggression is not the result of prehuman ancestors having evolved murderous drives or violence as their preferred method of competition. (We prefer to compete without violence, if we can.) We fight because our species depends upon cooperation to such a degree that when we suspect untrustworthy intentions, defensive instincts understandably come into play: naturally, we react with avoidance,preemptive attack, or retribution.

In other words, normal uncertainty about what others will do is at the root of most human conflict. This is an insight we advisers can use in helping to resolve particular conflicts and turn some chronically frustrating, distrustful relationships into more trusting and trustworthy ones. We can reassure people in conflict that they aren’t “dysfunctional”. We can caution them not to label one another’s failure to meet expectations as “betrayal of trust.” We can suggest they pull back and try some less risky tests of one another’s reliability.

Family business relations, no less than other relationships, are a continual process of weighing the pros and cons of trusting versus skepticism: In this situation, how far should I trust this person? Trusting and trustworthiness are not general attributes of a person or family. On the contrary, the likelihood that one member will trust another depends on his or her prediction about the other’s trustworthiness in that particular situation.

Our goal is to improve people’s effectiveness at advancing shared goals. That means they must attempt to maximize the benefits of interdependence relative to its risks. They have to calibrate how far they trust someone in a role, according to the likelihood that the person will perform.

There’s no intrinsic good in trusting someone who isn’t yet trustworthy for a particular role. When the risk of nonperformance is high compared to the expected value of the other’s contribution, then distrust is wise.

Like trust, distrust varies with specific contexts and relationships. People sensibly make selective choices to trust others whom they don’t trust in general. And they sensibly don’t trust their most trusted associates in all circumstances. Family enterprise relationships are of special interest, not because there is anything unusual about them (after all, hunting or gathering as a family goes back to the earliest hominids), but because the wish to capture a premium in the trustworthiness of one’s kin meets the reality that working with them is often harder, not easier than with strangers.

Kenneth Kaye helps families work together in business, family offices, or their philanthropic foundations. Kaye’s published books and articles about the dynamics of family business are at www.kaye.com/fambz. Contact him at (847) 475-4090 or ken@kaye.com

The foregoing content reflects the opinions of White Oaks Wealth Advisors and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.

Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns.

Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.

Share:

Investment advisory services provided by White Oaks Wealth Advisors, Inc. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.