The trust crisis we’re living in, and what to do about it

In an era marked by global distrust and rapid change, leadership demands a renewed focus on courage and purpose. This was the central theme of a recent event hosted by London Business School's Wheeler Institute for Business and Development, featuring Halla Tómasdóttir, President of Iceland.

Her insights, drawn from a career spanning business, entrepreneurship, and national leadership, offer a blueprint for navigating the complexities of modern governance and business.

“We live in a trust crisis,” President Tómasdóttir began, arguing that effective leadership today is “more about bridge‑building than ever.” The imperative, she said, is to bring business, government and citizens to the same table as “we frankly don’t trust each other anymore.”

“We are not well,” she stated, adding a stark look at the current state of the world where the environment is suffering, humans are lonely, we’re at war and there’s misinformation everywhere. The President urged a reset from a narrow reading of shareholder primacy to a deeper, purpose‑driven model in which enterprise solves human and planetary problems.

“Business at its best solves problems,” she said, pointing to a system currently designed too tightly around quarterly profit.

Crisis of conformity

The problems are systemic, she added, noting that roughly 10 companies make up about 20 percent of the worlds’ economy. This has led to a crisis of inequality. “They (the largest companies) mine our data that we give mindlessly to them, while robbing us of our attention,” she added.

Change is underway, she added, via broader sustainability disclosure standards and more diverse boardrooms to counter what she called a “crisis of conformity.” Examples ranged from Unilever’s long‑term orientation under Paul Polman, buying purposeful companies, to IKEA’s decision to engage youth climate activists as an advisory group, and Novonesis (formerly Novozymes), which scales nature‑based bio‑solutions for industry.

If short‑termism and conformity are design flaws, the human obstacle is fear. “Fear lives in our heads and is paralysing; courage lives in the heart,” she said, stressing that courage must be sandwiched with humility, acknowledging that no one has all the answers. “We need to rely on the heart a little bit more right now,” she added.

Closing gender gaps – bringing both younger and older workers to the table – is crucial, she argued, because more balanced leadership teams tend to collaborate, lengthen time horizons and elevate employees.

While business still has a design problem, she noted it is improving as international sustainability standards are coming in. But a true lack of diversity – age, gender, global, ethnic, neurodiversity – all needs improving.

“We all have a role in this great transformation that is underway,” she said.

Iceland as a role model

Iceland’s own trajectory has supplied a successful, living case study. Tómasdóttir traced the cultural reset catalysed by the 1975 women’s strike, also known as “the day Iceland stood still”, which gave way to universal childcare and equal parental leave, widening the labour force and prosperity for the country’s citizens.

“Using all your people is smart economic policy,” she said. Iceland now consistently tops global gender‑equality indices and participates in the Wellbeing Economy Governments Alliance with Scotland, New Zealand and Finland (and collaboration with Canada), embedding measures such as mental health into national goals and budgets.

On the state’s role, the President was forthright: governments should set rules and incentives that reward long‑term value creation. She criticised environmentally harmful subsidies, especially during Europe’s recent energy crisis, and urged redirecting even a portion of them to accelerate the green transition. “Align incentives with the future we want and need, not the past,” she said, calling the transition both economically sensible and geopolitically stabilising.

How to lead with purpose

President Tómasdóttir encourages the younger generation to do the inner work, clarify purpose and principles, and exercise everyday leadership through voice, choices and contribution.

She closed the evening with a practical call to action for boardrooms and classrooms alike: broaden the stakeholder lens, lengthen time horizons, diversify who decides and measure what matters, including wellbeing.

Each of us has the potential to lead with purpose, she said, contributing to a more equitable and sustainable world. Her insights challenge us to rethink conventional models and embrace a future where business and government work together to tackle global challenges.

“There is a leader inside each of us,” President Tómasdóttir said. “Now we must lend it to a meaningful purpose, and to a better world.”

Watch the whole conversation here: Wheeler Institute YouTube channel