Crisis, criticisms, and damaged credibility: A case study of organisational trust repair by a Victorian joint-stock bank

Abstract

This article uses the organisational trust repair model developed by Gillespie and Dietz to examine how the Royal Bank of Liverpool, which suspended payments during the commercial crisis in 1847, escaped liquidation and resumed business. This case study uses newspaper reports and selected corporate records to explore the narratives of trust between bank management and different interest groups over the course of resuscitating the establishment. There are three important aspects which shaped the dynamics of trust repair in this case: (1) the bank’s appeal to its reputational past in the community to reassert its credibility; (2) the management’s tactful reconciliation of competing expectations from different parties, and (3) the renegotiation of boundaries between directors’ power and stakeholders’ rights. By exploring the professional standpoint, local attributes and moral discourses within which the bank was resuscitated, this article evaluates the firm’s strategies for rebuilding trust and its corporate legitimacy through a contemporary theoretical perspective, thus offering lessons for corporate trust repair in the twenty-first century.