Transparency Is The Currency of Trust

Transparency is a popular term in business these days. Let’s examine why, what transparency is, and how to create more of it in our organizations.

Why Transparency Matters

Trust is the foundation of a relationship. The more trust we have, the better our businesses function.

Transparency builds or restores trust of stakeholders (employees, investors, partners, vendors), bit by bit, in an organization.

If we want more trust, we must be more transparent.

What is Transparency?

Transparency is the ability for interested parties to see what’s going on.

In business relationships and the workplace, it means proactively sharing or making available vital information about the company to employees, partners, and possibly even competitors.

In Andrew Schnackenberg’s 2014 paper on Organizational Transparency, he and his co-authors cite four criteria, four dimensions of transparency:

  • Quantity of Information Sharing
  • Intentional Sharing
  • Perception of Sharing
  • Quality of Shared Information

Organizations with high transparency share vital information intentionally, in a systematic, proactive way; stakeholders in those organizations perceive transparency as a function of how easily accessed information is. In transparent organizations, information of high quality, high importance, is shared as readily as information of lesser importance.

How Organizations Create Transparency

To create transparency, examine the four dimensions. How much are we doing in each dimension?

Quantity: How much information do we share? Some organizations share almost nothing. Other organizations share everything with their employees and even the world. Timing is also an important function of quantity. Do we share only at the annual meeting, or do we share all day, every day?

Key takeaway: Share more frequently to increase transparency.

Intent: Do we share proactively? Do we make an effort to be up front and push information to people, or do we put information that’s important to people on a backwater intranet page that no one knows exists?

Key takeaway: Share where people receive information to increase transparency.

Perception: Do our stakeholders (investors, employees, partners) understand that they’re receiving information? Check things like employee surveys and informal office chatter; if people say they feel left out, then they perceive a deficit of sharing despite our efforts. We must change how we share to fit how they find information.

Key takeaway: Ask people how they perceive transparency efforts to increase transparency.

Quality: What information do we share? How important is it? At companies like Buffer, salaries are public. Talk about radical transparency. Other key topics employees want to know about include company performance, financial health, and overall direction – information that shouldn’t live in just the boardroom for organizations that desire transparency.

Key takeaway: Share vital information to increase transparency.

The Bottom Line

If we need to create more trust, we must create more transparency by sharing lots of important information proactively, and ensuring stakeholders understand it.


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