Ironically, the public and private guardians of trust also stand in a trust relationship with those whom they hope to reassure. Guardians of trust are agents. They perform social-control roles for principals who have conferred trust on others (or who consider doing so) and they act to collectivize and spread the risk of these trust relationships through insurance-like schemes. As agents, guardians hold the same precarious relationships with their principals as do those trustees they now oversee: guardians frequently have greater expertise than their principals and are therefore relatively immune from principals' assessments of their role competence. They require a considerable amount of discretionary power (that can also be exercised for self-interest). The physical and social distances that necessarily separate guardians from principals minimize the opportunities for the latter to scrutinize role performance. And insurancelike arrangements provided by these trustees of trust often constitute futures transactions that offer few intrinsic guarantees that future promises or obligations will be met.

XREF: Extends principal-agent theory to institutions meant to police trust, mirroring the same expertise-asymmetry and discretion problems faced by the trustees they regulate.

Shapiro, Susan P., The Social Control of Imper…, loc. 111