Are NDA’s a sign of trust or distrust?

We’ve been asked to sign quite a few Non Disclosure Agreements (NDAs) recently with various organisations, which is somewhat ironic for a company called 100%Open, but it’s par for the course in the innovation business I guess. And it got me thinking whether being asked to sign an NDA was actually a sign of trust rather than distrust.

On the one hand, I think of NDA’s as a necessary and beaurecratic evil. As a friend of mine recently told me – who happens to be going through a divorce and is looking for a fair settlement for both sides – the law is not designed to be terribly collaborative, rather it is designed for there to be clear winners and losers. For that reason I am normally an advocate for keeping the lawyers out of the room until the point where there is actually something to argue about given the old adage “It’s better to own 50% of something than 100% of nothing”. And so in that context, waving an NDA about before you’ve even had a conversation or done anything seems premature and overly cautious.

On the other hand, and the cause of our recent flurry of NDA signing, has arisen from a series of conversations where people clearly seem to like what we are saying and are trusting us enough to want to start sharing confidential information and therefore it’s actually feels like a rather nice legitamisation of the seriousness with which they take you as a potential collaboration partner.

So I’m changing my view of the role NDA’s play in open innovation and actually think that, in certain cases, it is actually a sign that you’ve reached a certain trust threshold which can only be a good thing. However, I haven’t fully made up my mind and as ever would appreciate any other opinions as ever.

Comments

  1. If one views trust as a single state thing (trusted or mistrusted) then sure maybe life would be better if we all viewed NDA’s as a sign of being trusted, but…

    Trust isn’t singular, it’s more a scale with context.

    I may trust someone wholly with my bank card and details, whilst someone else just the card itself.

    Contracts in all their guises (and I’d love to be proven otherwise) assume a default position of mistrust, otherwise why put it in a contract?

    NDA’s may (as you say) stick a stake in the ground at the point on the scale where you have become trusted enough but I still find it hard to view them as little more than;

    i) validation that one was mistrusted, and
    ii) that whilst trusted enough to view/hear/learn something it is only under the proviso that there is legal recourse.

    In an ideal world things would be so much simpler if we assumed a default position of trusting others. I think it was Anthony Seldon that once said “to be trustworthy one must first be trusted.”

    Of course we don’t live in an ideal world :o(

  2. Thanks Barney,

    Great response and of course I agree wholeheartedly. Alas we don’t live in an ideal world and think we ought to assume trust but also not take it for granted. Increasingly I think our reputations as individuals or organisations are becoming the currency that we trade, rather than just our knowledge or ideas, and so recourse to contracts should be a last resort. As a pragmatist I still like to think that, in the beurecratic world of most organisations an NDA is more a signifier of trust wrapped up in legal language.

    All the best,
    Roland

  3. It’s a very good question Roland and one I have conjured with myself recently. At Creative Barcode we talk about it as a ‘trust-based’ system and indeed we have a Trust Charter that many have signed.

    We stopped short of marketing the Trust Charter element as it felt odd to have to do that. Those who want to sign it can.

    Does it mean others are likely to trust them more? Probably. It is the oddity about having proof.

    Reverse the question – if someone refuses to sign an NDA – do you trust them less.

    Probably

  4. I favour a NDA or Confidentiality Agreement as soon as possible. As a consultant or advisor the quicker you can open up conversations, the quicker you can get at the issues that need ‘consultation’. So often I see perspective clients struggle within themselves of what to ‘reveal’ or clarify. Signing a document forms the bond that allows for a more congenial flow where you don’t sit opposite each other, you sit side by side exchanging ‘expertise’ that grows in value the deeper the conversations/ collaborations go. So get the (potential) barriers out of the way early to allow this free-flow, essential for best advice.

  5. Thanks Maxine. Interesting to hear about your experience of hte Trust Charter and really like your inverted question though it tends not to apply to us as we are not the ones instigating the NDA signing. Alas mostly NDA’s are just ‘company poicy’ so it’s usually not something people feel much ability to influence.

    Paul – I think I’m with you too and it means you can ‘get started’ more quickly in many ways

    Cheers,
    Roland

  6. I think you can quite easily see an NDA as a sign of trust. The profferer is saying “I trust you not to share my secrets, but let’s record that fact so we both understand that I’m relying on your trustworthiness.”

    After all, in all but the most degenerate of cases, the sharer would rather you kept his information secret than have the “benefit” of the penalties the NDA gives him if you don’t. It’s not that kind of contract.

  7. Contracts, NDA,s, Confidentiality Agreements should not be viewed as a trust or mistrust issue. Instead I submit that they are simply a clarification of the rules you and the other party have agreed to play by. The setting of rules is not to me an indication that I trust or mistrust you. The setting of rules is simply a good practice that offers both you and the other party involved a clear understanding of the issues at hand, while also in many cases offering a method of resolution that can be used, thus potentially avoiding the courts should there be a disagreement.
    If you think about the purpose of an NDA, someone is coming to you to share an idea or process, something they think has real value, and they want your opinion on how to proceed or move forward, this should be taken as a compliment or as stated in the original blog post “it actually feels like a rather nice legitamisation of the seriousness with which they take you as a potential collaboration partner.”

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