Trust is regarded as a good thing. But too much of it can wreak havoc and destroy lives.

Such are findings of Martin Gargiulo, Associate Professor of Organisational Behaviour at INSEAD. As reported here, trust is associated with lower levels of monitoring, vigilance and safeguards towards the behaviour of the trusted party. Trust is also associated with higher levels of commitment to the relationship with the person or party being trusted. In other words, people are prepared to invest more with the trusted person. And finally, when you have trust, there is more exchange between the parties.

The tragic stories of the people who lost a fortune with Bernard Madoff tells us what happens when that runs awry.

It's an interesting point. The only problem is that too much monitoring, by definition, destroy trust. That's a point taken up in the Trusted Advisor blog. "If you subject every micro instance of trust to a micro-consideration of its worth, you destroy trust at the macro level. Want a philandering spouse? Let her know every day how much you fear her infidelity. Want a suspicious, self-serving supplier? Constantly check them for suspicious, self-serving behavior. Want thieving employees? Give them all monthly lie detector tests."

The reality is trust just happens. Subject it too much scrutiny and you destroy its essence. Maybe the answer lies in striking some sort of balance and healthy skepticism. Something Madoff's investors could have used.