You lose a reputation in instalments

You find out in the negative. The tender you were not invited to. The introduction that never came. The second meeting that keeps moving until it stops being scheduled.

Nothing is said to you, and nothing needs to be. By the time you notice the pattern, the decisions behind it were made months ago. It was reported to everybody else first.

The dramatic version is the rare one

The version people expect is a single event. An email goes wide. A deal fails in public. That happens, and it is rare.

What actually happens is smaller and slower. A delivery date moves and nobody is told until the day. A question about an invoice gets parked. Someone is managed out in a way that is defensible and still leaves a taste with the four people who watched it. Each is minor enough to explain away. None is an event. Each is a withdrawal, made by someone who will never tell you they made it.

Charlie Munger, in a 2007 commencement address at USC's law school, called deserved trust the highest form a civilisation can reach. The load-bearing word is deserved. On one side is trust earned transaction by transaction, by people who watched what you did. On the other is trust extended on appearance: your title, your last result, the person who introduced you. Both feel identical from the inside. Only one survives a bad quarter.

The web is not yours to hold

Munger's other word is web. Your reputation does not live in your head or on your website. It lives in a network of conversations you are not present for. Someone rings someone about you. That call takes ninety seconds, and you will never hear it.

You cannot manage it where it happens, only what gets reported into it. Three things cost far more in those calls than they appear to cost on the day.

• Quiet slippage. Being late is usually survivable. Being late without telling anyone is the thing that gets described.
• Selective candour. Every sentence is true and the picture is wrong. People work it out eventually, and when they do they re-read every earlier conversation with you.
• Winning the small argument. Being right about a four-figure invoice line in front of a client's team is the most expensive win available to you.

The awkward half of the sentence

Munger does not stop at deserved trust. The next line is the one people leave out: "Not much procedure, just totally reliable people correctly trusting one another." Procedure is what he is describing the absence of, which is awkward, because the exercise at the end of this article is a procedure. A business that has to audit its way to reliability does not have the seamless web. The audit is the entry fee, not the destination.

Deposits and withdrawals are made in the same currency. A date named and met is the deposit; the same date missed in silence is the withdrawal. They do not clear at the same speed. A withdrawal clears the day it happens, in one conversation with someone who now has a story. A deposit clears slowly, because one delivery is a data point and six is a pattern. Which is why this is a habit, not an exercise.

What a board is actually pricing

I chaired the board of an ASX-listed company, ran a CEO search and took it through to a relisting. What stays with me is how little of what you are told can be verified in the time available.

For a CEO appointment you get a record, some interviews and a handful of calls to people who worked with the candidate. The board is pricing the credibility of whoever is speaking. You learn to listen for the pause: ask a referee how someone handled a bad quarter and there is one thing they will say plainly and one they will only imply, and the gap is the reference. That price was set years earlier, in ordinary weeks, by someone not thinking about their reputation at all.

A relisting is the same test with more people running it. Nobody re-reads the documents; they decide whether the people attached to them do what they said they would.

Do this before Friday

Open your sent mail for the last thirty days. Pull out every sentence where you committed to a thing and a date. "I'll come back to you Thursday." "We'll have it costed by month end." Put them in one list.

Mark each line: delivered on the date, delivered late with warning, delivered late without warning, or never delivered and never mentioned again. The last two categories are your actual reputation. Not your intentions. Not your average. Those lines.

Then take the oldest one still open and close it this week. Not with an apology. With the thing. Then put the same half hour in the calendar for the last Friday of the month, because deposits clear slowly.