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Transparency in Business:
Why It Matters
An Experts Exchange Whitepaper

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In many cases, the word transparency is used as little more than a buzzword, a marketing
opportunity. Whether it’s a corporate executive looking to win back disillusioned consumers
and shareholders or a politician making whatever promises necessary to obtain public office,
this term seems to have earned a bad rap over the years. And as a result, many have come to
question the authenticity of those who use transparency as a part of their normal vernacular.
While observing the steady decay of this word would be a fascinating study in itself, there
is another, more beneficial lesson to be learned in the wake of this linguistic disaster—
particularly as it pertains to the way businesses are run.
This lesson can be learned, at least in part, by simply rediscovering what true transparency
is—what does transparency actually mean? After that, one can utilize that understanding to
discern the purpose of remaining transparent in the way s/he does business, as well as the
often detrimental consequences of flouting that responsibility. Finally, with that newfound
understanding, one can generate useful, ingenuous action plan for increasing transparency in
his or her own business.
INTRODUCTION

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How to Make Your Business More Transparent6
About Experts Exchange9
The Purpose of Transparency in Business4
TABLE OF CONTENTS
Business Transparency Defined4

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thought of as a burden on companies as a
result of increased regulatory constraints.
Although it’s true that the messaging of
transparency ought to be mended into the
communication strategy of every business,
it is precisely this mindset that makes this
discussion so necessary.
The Purpose of
Transparency in Business
In order to get around this more utilitarian,
often negative disposition toward
transparency, it is important to discern its
greater purpose, specifically when it comes
to the area of doing business. Such a rationale
Business Transparency Defined
In its simplest sense, business transparency
means clear, unhindered honesty in the
way that s/he does business. But it’s more
than that. One business dictionary defines
transparency as a “lack of hidden agendas or
conditions, accompanied by the availability
of full information required for collaboration,
cooperation, and collective decision making.”
The same source describes it as an “essential
condition for a free and open exchange
whereby the rules and reasons behind
regulatory measures are fair and clear to all
participants.” Meanwhile, another source
defines transparency as “the full, accurate, and
timely disclosure of information.”
In other words, business transparency is more
than simple honesty—much more. Being
transparent is dependent not the degree,
factuality, and timeliness of that honesty. For
example, if a company engages in a practice
that costs its members or shareholders
money, but doesn’t admit its responsibility for
the loss until years later, that is not transparent
behavior, regardless of how completely the
company discloses the details of its behavior.
Unfortunately, there are some detractors
who prefer that transparency retain its more
strategic character, and perhaps even be
Transparency in Business:
Why It Matters

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can be found when one considers the
company that they run not only as a means of
earning a profit but as an extension of one’s
own personal reputation.
Whether you currently are or have been an
employee in the past, we’ve all heard that
saying: “You are the face of the company.” All
too often, though, this truth is only reinforced
among the part of the workforce that doesn’t
have a long-term vested interest in the
financial success of the company. It is used
as a call to action or a prod against worker
complacency rather than a much-needed
reminder—from the lowest level employee
to the highest-level executive—that personal
conduct is a reflection of both the person and
the company s/he represents.
More importantly, however, the opposite
is also true: Business practices are also a
reflection on the people who adopt said
practices. While the former is pertinent no
matter one’s position on the employee totem,
this truth is particularly relevant to the owners,
executives, and managers—the decision
makers.
While a poor decision might cost a staffer
his or her job and at worst, create a short-
lived scandal among those affected, the
ramifications of a decision maker’s conduct are
far more widespread. The effects reach not
just into the financial interests of a company,
but into the community and environment in
which it does business, not to mention the
lives of the decision makers themselves.
Returning to the issue at hand, it becomes
clear then that the true purpose of
transparency is not simply to appease
regulators, to increase profits, or to please
shareholders. Sure, certain industry
safeguards may require a particular degree
of transparency, and of course there’s a
monetary incentive for businesses to be
more honest. But there’s a greater reason
that these things are true. A business that
truly increases the wellbeing of all that its
operation affects has little, if anything to hide.
With the exception of, say, a legitimate trade
secret, a business that delivers a product or
service of real value to customers and greater
society alike has minimal difficulty being truly
transparent.
In fact, that’s why such regulations exist in the
first place—to ensure that businesses are
sufficiently demonstrating their impact on
society. That’s why companies that provide
serve and the communities in which they
“A business that truly increases
the wellbeing of all that its
operation affects has little, if
anything to hide.”

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operate benefit financially by being completely,
accurately, and expeditiously transparent
about how they do business.
To be sure, the purpose of transparency is to
demonstrate that a company is truly the kind
of business that it wants people to think it is.
As one writer puts it, “transparency is
assurance,” and “less information means less
certainty for investors.” Unfortunately, the
definition of investor has become so narrowly
defined that it only means those with a direct
financial stake in the company. But in reality,
those who provide financial support are only
one type of investor. Customers, employees,
communities—they all hold a stake in the way
that a company conducts itself. And in many
ways, the risk these groups take cannot be
measured in dollars and cents.
How to Make Your Business
More Transparent
In all fairness, though, the idea of exposing
the internal operations, structures and even
the culture of a company can be a scary thing.
In an instant gratification economy such as
ours, where brand perception can often trump
the quality of the good or service being sold,
it might be troubling to consider the potential
fallout once customers become aware of
the amount of time and money that is spent
investing the in the perception of a product,
rather than the product itself.
But that should be a call to action, not a reason
to be more reclusive. It ought to be seen
as an opportunity to reallocate resources
in a way that creates increased value for
customers and communities, which in turn
will yield increased profitability and long-term
sustainability for the company. And whether
you are a solo operation, own a small business,
or help run a large multinational corporation,
a few guidelines apply universally in efforts to
increase business transparency.
Don’t Be Disingenuous
People can smell you-know-what from a mile
away, so don’t decorate your transparency
initiative with needless fluff that will at best
distract from your message or worse, cause
direct harm to it. This means talking about
what you know and being who you really
“To be sure, the purpose of
transparency is to demonstrate
that a company is truly the kind
of business that it wants
people to think it is.”

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are—both as a company and as an individual.
As Mashable’s Sharlyn Lauby puts it, “It’s just as
important to be viewed as a person with a lot
of talented resources as it is to be viewed as an
expert.”
In other words, make sure that those who
come in contact with your business are able
to know the people who actually run it. Instead
of the overused stock photos, professional
actors, and paid referrals, give people a real
glimpse of who you are and who actually
provides the good or service.
Honesty Really Is The Best Policy
If it’s relevant to what you do, the people
affected have a right to know. All too often,
critical details of how a company operates are
divulged on a “need to know” basis. However,
as soon as one of those details becomes
public knowledge, that business’s reputation—
and the reputation of the people running it—
are compromised.
Lauby continues, “If you neglect to include
something—that others might have thought
was important—this will impact your…
credibility as much as lying outright.”
People and communities deserve to know the
ins and outs of a company’s operation before
they begin to patronize it or, if applicable,
provide the space, infrastructure, and labor
necessary to open a new location. Keep this
in mind: As much as people celebrate good
surprises, they tend to give just as much, if not
more publicity to bad ones.
Remaining honest is also important as
companies adjust and adapt. By involving the
community in that process, companies are
able to maintain a high quality of rapport with
the public, as well as get a better idea of what
consumers actually want or need. Both of
which reduce the costs of needless changes
while increasing the appeal of the good or
service your company provides.
Timing Is Everything
The best time to respond to a concern or
increase transparency is yesterday. But today’s
not such a bad time either. Given the countless
real-time tools we have at our disposal—no
matter what the size of the enterprise—there
is no excuse for being slow to act. Blogs,
social media, email campaigns—all of these
outreach mechanisms allow you to maintain a
continuous dialogue with customers

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and community alike.
When something’s wrong, don’t wait until you
have to react to someone else pointing it out.
Get in front of the issue and make sure that the
people that have entrusted you to do business
in their community know you’re doing all you
can to resolve it. The longer you leave people
hanging, the more likely they are to think the
worst and look to replace you—and depending
on how serious the issue is, perhaps even
remove you.
Perhaps the best way to remember the
importance of full and complete transparency
in business is to remain mindful of the fact
that a business is meant not only to cultivate a
community of people interested in the product
or service it offers, but to offer something that
benefits the community that contributes to
or is affected by that company’s actions. Yes,
transparency is certainly an appealing means
to a lucrative end, but it’s also an end in itself.
Transparency doesn’t just help businesses
become financially successful. It makes them
good citizens. And good citizens never go out
of business.
“When something’s wrong,
don’t wait until you have to
react to someone else
pointing it out.”

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