Chapter 7: A Question of Trust: The Story of Reykjavík Energy

Abstract

Competence, credibility, image and integrity all came under scrutiny during the economic crisis in Iceland. This period was not just about the financial system, it was about trust, something the Icelandic economy and individual businesses in the country lost in the wake of the crash. Reykjavík Energy, an Icelandic power- and utility-company, was one such company. In the year leading up to the economic crisis, mistrust in Reykjavík Energy had taken root and the firm’s image was already under attack. When its external debt doubled in the crash with the depreciation of the Icelandic króna, it was clear that the company’s position was unsustainable. In the years following the crisis, the rebuilding of the public’s trust in Reykjavík Energy has been a demanding task. The project of restoring trust and strengthening the firm was two-fold. On the one hand, short-term measures that were necessary to keep the company alive were taken. On the other hand, work was done to develop the foundations for long-term results and sustainable management. Reykjavík Energy, to a large extent, has now reclaimed its position in the eyes of its stakeholders. However, trust is not a constant but something that is earned over time and the challenge for the future is therefore to maintain it while learning from the past.