In 2020 and early 2021, we’ve seen a dramatic increase in business leaders talking about transparency in their communication to stakeholders. In the midst of so much uncertainty due to Covid, employees, investors, customers, and consumers need straight talk. Tell us how it really is and how you’re really doing, they seem to be saying. Don’t sugar coat things to make them seem better than they are, and don’t pretend things fine when they’re not.
This trend reminded us of our Benedictine University colleague Dr. Rob Rebman, an expert in corporate reporting, especially the corporate social responsibility (CSR) reports published annually by large, publicly traded firms.
Rebman’s research reveals opportunities for companies to be more transparent while also highlighting their organization’s positive track record. This is true for individual leaders as well. Transparency builds stronger relationships among team members and with clients. It establishes a company’s reliability and trustworthiness and improves internal and external relationships. It also gives stakeholders quicker access to information that matters, allowing them to make better informed decisions. The downsides are minimal and the benefits are significant. Our four tips for improving transparency will help you get started. But first, let’s dig deeper into Rebman’s findings.
The sad state of corporate reporting
Rebman recently took a randomly selected sample of 143 companies from the Fortune 1000 list and focused on the social aspect of their CSR reporting. This data looks at the company’s actions in areas such as labor, human rights, and supply chain. What he found is shocking: about 40% of the selected companies didn’t have published reports. For those that did, Rebman compared what was published to the the 34 metrics in the Global Reporting Initiative (GRI) framework.
On average, of the 34 possible metrics, companies shared information about only 5 or 6 of them. “Companies are not saying much,” Rebman summarizes.
This silence is baffling because the data for all 34 metrics is clearly available and has little risk associated with it. For example, one metric considers data breaches. Most companies have not had a data breach, so this should be an easy success to share. Yet they fail to do so. “There’s low-hanging fruit they’re just leaving there.”
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What do they do instead? “A lot of fluff and pretty pictures,” Rebman says.
“Companies love to say that they are diverse,” Rebman says as an example, but instead of providing actual data, which exists in their HR systems, “They provide a picture of a woman driving a forklift truck.”
Rebman’s findings are consistent with other research. For example, Shift, a center that tracks data related to the UN Guiding Principles for Business and Human Rights, found over half of companies don’t clarify which human rights are most important to their value chain, and 45% provide no information at all about how they track their human rights performance.
Applying the lessons of reporting to be more transparent
There’s good reason to be more thorough and transparent in reporting. Voluntary reporting can prevent government regulation, and strong, values-driven companies tend to attract loyal employees and customers.
Drawing on Rebman’s work, we’ve identified four ways to be more effective at transparency. These ideas are important not just for the executives in charge of a company’s annual CSR report but for individual leaders who want to meet growing demands for transparency in communication with stakeholders.
Cut down on the fluff
In the glossy pages of a corporate report, images and carefully designed content often fill space, crowding out the real data that belongs there. This may make reports look better, but it distracts from substance.
This doesn’t only happen in reporting. Not long ago, we were in a senior team meeting that lasted 60 minutes when it should have finished in 20. Why? The executive leading the session buried his message in so much fluff that nobody understood it. As a result, his communication eroded trust and led to uncertainty, resistance, and anger within his business unit.
If what you have to communicate matters, cut the filler, and be direct and transparent about your message. Add the pretty pictures only after you’re certain the actual content is substantial.
Give all the details you can
Rebman found that companies often fail to share important data, even when it is neutral or positive. If you want your team members to perceive you as a transparent and authentic leader, you will benefit by providing all the details you can.
Transparency must be responsible. Sometimes that means not sharing information. If an employee was fired for misconduct, colleagues who didn’t witness her behavior may wonder what happened. They may worry they could be dismissed without warning. Responsible transparency means addressing this worry without disclosing sensitive personal information about the situation.
Be honest about short-comings and set a plan for growth
If you’re committed to give all the details you can, what do you do when the information isn’t positive? Share it anyway, and then share your path for improvement. Better yet, invite ideas from your team and other stakeholders on how you can move the needle. Create a plan for growth, and commit to it. Good reporting helps keep the metrics and company focused on the future.
Connect your transparency to your values
Finally, Rebman’s research shows that top companies align their values to the metrics they report on. If you have a value of care for people, one way to demonstrate this is to report on efforts to prevent human trafficking across your supply chain. Likewise, reporting on diversity, and inclusion metrics demonstrates your investment in equity and care for all people.
As an individual leader, you can identify your own values and let them guide your efforts at being transparent. Not long ago, we spoke with a senior manager who wants his direct reports to feel more comfortable asking for help. Vulnerability is a value this leader holds because he believes it’s important for building healthy relationships; he believes stronger relationships produce better outcomes. To be more transparent, he regularly reminds himself that transparency is an opportunity to be vulnerable, something he wants to grow in himself and his team members.
Transparency in reporting or relationships is an important way to build strength; it assures stakeholders that you’re trustworthy and responsible. We hope our four tips help you identify opportunities for increased transparency at work. Share your own tips on Twitter @ValuesDriven.