Transparency in business refers to the open sharing of information about various company operations with shareholders, partners, employees, and customers. It’s defined by the lack of hidden agendas, accompanied by the availability of relevant information.
Benefits of Transparency in Business
An increasing number of companies are finding value in practicing transparency in business because it brings several benefits, both within the workplace and with shareholders, investors, and customers. Here are some examples:
A transparent company builds a relationship with its stakeholders and employees founded on deep trust. Because of this, shareholders are more confident, investors are more supportive, employees are better satisfied, and customers are more loyal—all contributing to the overall growth of the company.
Improved Employee Morale and Workplace Productivity
When a company is transparent about its practices, employees tend to be happier and more engaged, knowing that their company recognizes their value and trusts in their abilities. This leads to improved employee morale which, in turn, translates to increased workplace productivity and better bottom lines.
With the availability of relevant information, companies can communicate more effectively with their shareholders and employees to share the company’s direction and improve its operations.
It opens up the floor to ideas from everybody, not just top management—which is very important, especially when it comes to decisions that ultimately affect the workers. Through open-access data, businesses can also gather more informed insights and make better decisions.
Transparency breeds responsibility because the effect of an individual, team, or the whole company’s actions can be seen through reports. This encourages accountability, too, in the sense that those responsible are made aware of what they can do to perform better.
Being in the know makes employees feel valued in the company, strengthening the feeling that they are part of a whole; not just a hidden cog in the wheel. That, coupled with an opportunity to solve challenges and problems that a company openly discloses to its employees, stimulates creative thinking, leading to strengthened innovation that can potentially further a company against its competition.
How to Practice Transparency in Business
Transparency in business is grounded in honesty, openness, and accountability. Once you set policies founded on those basic principles, you’re set to practice transparency. But how do you even get started? Here are some concrete ways you can practice transparency in business, whether the business is a cooperative business or regular business.
Update Information Consistently
Transparency is a continuous process. You must constantly update information, making sure that details are consistent everywhere. Don’t share information just when it’s needed, either (e.g. when there’s a call for it after a scandal); be upfront about it.
Embody and Encourage Accountability
Transparency doesn’t stop with the higher-ups of the company. To be truly transparent, the practice has to be embodied by everyone. As a business owner, employer, or manager, it’s important to set a good example by being responsible and accountable for your own work, reporting your successes, and, more importantly, points for improvement.
Share Information With Your Employees
A common misconception about transparency is that it’s only afforded to shareholders, investors, and customers. Many companies fail to be transparent to their employees.
But sharing information internally is one of the pillars of transparency, and it’s needed to reap the benefits of collaboration. It’s also essential because your employees are the people who can act directly based on information about sales, marketing, finance, etc. Learn more about workplace diversity in business.
Communication is important in a transparent company because this is often where the benefits of shared data begin. Encourage communication within your company by opening channels and providing shareholders and customers with avenues to give feedback and insight about your company, as well.
Nurture an Open but Respectful Environment
A transparent company is nurtured by an open but respectful environment. Everyone must be comfortable and confident to share their insights and be accountable for their actions. But at the same time, there should still be a line that respects the privacy of people.
Conclusion: Transparency Isn’t One-Size-Fits-All
Transparency practices aren’t the same for every company. It varies depending on the industry, the business, and the company culture. So, as a business owner, employer, or manager, you must tailor how transparency is perceived and implemented based on what’s best for your company.