Trust, Loyalty and Cooperation

B.A.K. Rider, ed., The Realm of Company Law, London: Kluwer Law International, Pp. 53-80, 1998

Posted: 29 Mar 1999

See all articles by Brian R. Cheffins

Brian R. Cheffins

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)


Trust, loyalty and cooperation are concepts which have been discussed in highly favourable terms. Management theorists implore executives to engage the hearts and minds of workers with assurances of continued employment and promises to develop existing skills and capabilities. Customers and suppliers are similarly urged to develop alliances and tighter links so as to foster flexible responses to changing circumstances. British Prime Minister Tony Blair has stressed that it is imperative to build relationships of trust in society via a "stakeholder" economy in which a say is available to all.

While trust, loyalty and related norms may have a crucial economic role to play, it does not follow that regulation should be used to foster their development. Since it is sensible business practice to act in a cooperative manner, laws of this character will often be redundant and could in fact serve to reduce reliance on trust and loyalty. Also, using the legal system to try to ensure that trust and related concepts are crucial elements in a country's business culture will provide a platform for opportunistic litigation and might lead to the introduction of a bureaucratic enforcement regime.

The book can be ordered on the Kluwer Law International website:

JEL Classification: K22, L14, M14

Suggested Citation

Cheffins, Brian R., Trust, Loyalty and Cooperation. B.A.K. Rider, ed., The Realm of Company Law, London: Kluwer Law International, Pp. 53-80, 1998. Available at SSRN:

Brian R. Cheffins (Contact Author)

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom
+44 1223 330084 (Phone)
+44 1223 330055 (Fax)

European Corporate Governance Institute (ECGI)

B-1050 Brussels

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