The myth about corporate opacity

18-06-2018 | Redacción CEU

The relationship between ethics and transparency is so close that some people use these terms indifferently. This association is not strange if we take into account that when ethics guides the behavior of a company, opacity can be perceived more as an obstacle than as a useful tool. Transparency is linked to concepts like trust and responsibility, and not only is it imperative in the public sphere, it is also beginning to be so in the private sector. What consequences does the opacity in business bring along? Why transparent companies are considered more efficient and competitive? What does the myth of corporate opacity consist of?

 

Companies gain nothing from being opaque, quite the contrary. Lies are short-lived. Whereas truth is always a powerful weapon. When a company closes its doors to information, it is not protecting anything. In case it hasn't displayed a reasonable and ethical behavior, it is prolonging its agony. If the company has nothing dishonorable to hide, it is losing an opportunity. A business strategy based on opacity can hide mala praxis in the short run. However, this logic cannot be sustained in the long run. Things will fall into place. Especially if we consider that we live in an environment that is more and more connected and characterized by digital transformation.

Debunking the myth

Among the arguments that are used against transparency we find the additional workload that entails offering this information, the possible commitment of economic interests, the loss of competitiveness as a result of revealing certain information, the tension that can be generated by the overexposure of the work of some professionals, or the promotion of a culture of blame. These reasons are less consistent when they are contrasted with the reasoning that defends the information openness:

  • The determined fight against corruption
  • Environmental care and respect for human rights
  • The guarantee of compliance with the commitments acquired and the responsibilities adopted
  • The control over the abuse of power of some companies
  • The considerable increase in the trust of workers and clients
  • The improvement of the corporate image

Despite the reluctance of some entrepreneurs to share the results of their work, the issues that are related to the development of their activity, their figures or the behavior of their company in terms that go beyond those strictly defined by law, transparency can become a great ally in the strategy of any company. There are both radical transparency advocates and those who call for restrain on its implementation. However, whatever their position, most experts agree on the benefits that an adequate boost in transparency can bring to companies.

The myth according to which corporate opacity provides protection is as false as it is insurmountable the firm that defends it. Of course, transparency and ethics are not synonymous. A company can be transparent and, nevertheless, it might not follow an ethical behavior. Few will be the advantages such company might gain in showing its true colors. In any case, if this company hides its behavior out of fear of the consequences, it will be affected in its internal structure and will not be able to prevent the effects of its irregular conduct arising in the long run. It is very difficult to achieve a climate of unity when a corporate culture is built on deception, greed, injustice, cowardice, excessive risk or lack of concern for consequences.

In order to be useful, transparency must be accompanied inexorably by ethics. When decisions are made based on solid values, the exercise of transparency not only helps to promote these principles, both within and outside the company, and contributes to build a better society, it also positions the company as an organization that deserves confidence by boosting its prestige and building up a great reputation. This, in turn, makes it be perceived as a more efficient company and therefore more competitive too.

When companies take care of the value culture and accompany it with a policy of transparency, they show a courageous behavior, but this also makes a safe bet. Opting for transparency is betting on the company itself. One of the great challenges of the business environment is to convince all professionals that this premise is true.

The myth about corporate opacity

People demand transparency

Companies are strong when all their members work in the same direction. In order to build a common goal, it is essential to offer an environment based on open communication, where active listening is practiced and dissenting opinions can be expressed. Otherwise, it will be difficult for the staff of a company to get involved at the same level as their top managers. They will not identify themselves with the organization.

When a company is transparent, the professionals who work in it develop a feeling of belonging. On the other hand, it is difficult to follow the path marked when nobody explains the reason for things, when nobody has access to numbers, when there is no space for debate or when nobody shares the progress made or the problems that arise when working. Transparency generates trust, creates unity and cohesion and clears uncertainty within organizations.

Companies are both the reflection of the people who make them up, as well as of the effect that they have on the society that surrounds them. Society has changed. Nowadays it is more aware of ethical issues and it has the possibility of interacting one-to-one with companies. A comment posted on a social network can produce a viral response and the consequent reputation crisis. The companies that are transparent are also more exposed, have a greater capacity to respond and offer a greater credibility. On the other hand, silence as response usually implies the assumption of what it is said.

Society no longer only demands greater clarity and responsibility on the part of public institutions and organizations, it also extends this demand to business wold. At The CEU IAM Business School we bet on a training which is completely adapted to what the current business environment requires, our Global MBA that starts from the premise that the business world cannot only be an end, but also a means to achieve a more just and sustainable world is a proof of it.