PAUL HOLMES: Opponents of corporate transparency clearly don't grasp the essence of stakeholder trust

I've been talking about the "age of transparency" for more than a decade. I first heard the phrase from veteran PR counselor E. Bruce Harrison, and liked it so much I used it at every opportunity. So when Don Tapscott and David Ticoll published their book, The Naked Corporation, late last year, I was excited to see someone take a long, thoughtful look at the business challenges - and opportunities - of an increasingly transparent world.

I've been talking about the "age of transparency" for more than a decade. I first heard the phrase from veteran PR counselor E. Bruce Harrison, and liked it so much I used it at every opportunity. So when Don Tapscott and David Ticoll published their book, The Naked Corporation, late last year, I was excited to see someone take a long, thoughtful look at the business challenges - and opportunities - of an increasingly transparent world.

The idea of a transparent society will be a familiar one to PRWeek readers. It is increasingly difficult for organizations to restrict public access to all kinds of information, which is why smart PR people are shifting their emphasis from trying to control the flow of information to making sure that information is placed in the correct context. But transparency has its discontents, such as Michael Schrage, who wrote a scathing review of The Naked Corporation in Across the Board, The Conference Board's publication. Schrage seized upon the phrase "trust but verify" to suggest companies shouldn't trust stakeholders with all this information. However, "trust but verify" is the philosophy driving transparency because each time a company does not offer information on executive compensation, product ingredients, or any activity, it tells employees, customers, investors, and others, "Trust us, but don't expect us to trust you." That isn't a very sound basis for building solid stakeholder relationships. Schrage then raises an issue popular among those uncomfortable with transparency when he warns of a conflict between employee privacy and the need for greater transparency. Yes, it's possible to imagine a situation in which stakeholders demand too much personal information. Schrage asks whether customers have the right to know "how much that... sales associate is making. Is he being rewarded on salary or commission?" Surely companies can work out a compromise. Individual salary data may be off-limits, but providing salary ranges for specific jobs doesn't compromise anyone's privacy. And I certainly want to know about salary versus commission, since commissions can drive people to some pretty reprehensible behavior. (Remember the Sears auto-repair-center crisis of a decade or so ago?) The bottom line is that companies don't have any choice. If stakeholders demand transparency, they'll get it, in part because competitive pressures will force companies to oblige, and in part because the information will almost inevitably escape. Do companies want to fight a losing battle and look like they're hiding something, or do they want to embrace the trend and ensure the information is presented in the best light? Tapscott and Ticoll don't think that should be a tough choice, nor do I.
  • Paul Holmes has spent the past 16 years writing about the PR business for publications including PRWeek, Inside PR, and Reputation Management. He is currently president of The Holmes Group and editor of www.holmesreport.com.

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