Tricky little number this one. On the one hand, companies are under constant and growing pressure to be more transparent, to disclose more about all of their activities. On the other, the more open and honest they are, the greater their chances of being criticized for those activities. After all, if no-one knows what you are up to, it significantly lowers the probability of becoming the target of complaints.
It’s not just financial information we are talking about. It’s an issue that applies across the communications spectrum, with environmental and social information right up there as potential trouble spots in the eyes of many companies. Get this from Tom Delfgauuw, Shell’s head of sustainable development, quoted in the latest issue of Ethical Performance: ‘It seems that the more transparent we are the more flak we get. It’s quite surprising how little flak those companies that do nothing actually get.’
Delfgauuw is not alone. His comments at an Environment Council conference in London last month echo similar thoughts from Tom Goldstein, chairman of Toys ‘R’ Us, who complained earlier in the year that his company had been subject to negative publicity as a direct result of its attempts to improve conditions in its supply chain. The message? Stick your head out of the foxhole and you become an obvious target for anyone trying to take a potshot.
They are both right, of course. If they hadn’t stuck their heads out I wouldn’t be talking about them now. But that’s what open and honest companies should expect and be ready to deal with. The big fear is that those with slightly smaller minds might use this sort of thinking as an excuse to hide information for good, mistakenly believing that corporate secrecy can pass as solid communications policy.
You get this type of ‘keep it under wraps’ philosophy at an awful lot of companies. And many of them turn out to be awful companies when information begins to leak out – as it always will. That’s the trouble with the idea that companies can keep things hidden for ever and ever, amen.
You can’t. Sooner or later it will emerge, blinking and shaking, into the bright light of publicity and then all hell will break loose, a whole lot more than if you had been open and honest about it in the first place.
It’s a balance, of course. And there are a host of regulations in each and every market to think about when constructing communications policies. But far too many companies use regulations, legal advice and competitive concerns as an excuse to pull down the shutters, lumping a whole lot of information that should be out there in with the truly confidential stuff. Ask any advisor who has tried to push a closed company down the road of an open and honest annual report or web site.
It seems strange that this type of thinking still exists when so much research points to the benefits of greater transparency – just look at this magazine’s own awards research for proof. But exist it does. It is epitomized in the sort of company that Shell was for many years before a spate of public relations disasters persuaded it to start changing its approach. It is a slow process. The benefits of open, honest communication take a long time to feed through and there will be blips along the way.
Let’s hope that those companies that have taken the brave step to stick their heads above the parapet are not scared back down again by a few cheap shots out of the blue. The longer they stay up there, out in the open, the greater the firepower needed to bring them down.
