Turning Vulnerability Into Strength: How Independent Regulatory Agencies Enhance Accountability and Build Stakeholder Trust

ABSTRACT Trustable environments are highly appreciated for regulatory performance, but difficult to emerge. A condition for making trust work is to accept vulnerability, and this holds both for stakeholders and agencies in public governance. Trust‐related vulnerability can be understood as a dynamic perception of potential harm derived from entering into a desired interaction. While stakeholders increased vulnerability due to voluntary exchanges with public bodies has been widely documented, the conditions under which agencies voluntarily increase their vulnerability remain less explored. Focusing on independent regulatory agencies (IRAs), this paper introduces a conceptual framework where agency vulnerability serves as a strategic tool to enhance IRAs' accountability, ultimately supporting these goals. We argue that IRAs intentionally incorporate vulnerability to make accountability efforts more credible, fostering stakeholder trust and facilitating operations. To achieve this, IRAs disclose sensitive information through accountability mechanisms, including transparency and participation initiatives. While this exposes them to criticism, penalization, or termination, it also strengthens stakeholder support and regulatory effectiveness. However, to manage risks, vulnerability is often selectively applied, prioritizing preferred stakeholders. We empirically apply this framework on Spanish data protection, finance, and food safety regulators. Our findings suggest that while vulnerability increases risks by enabling potential harm to IRAs, it ultimately mitigates accountability challenges and enhances trust among selected stakeholders, making accountability relationships more credible.