Corporate transparency

Last updated on 20 August 2017

Corporate transparency describes the extent to which a corporation's actions are observable by outsiders. This is a consequence of regulation, local norms, and the set of information, privacy, and business policies concerning corporate decision-making and operations openness to employees, stakeholders, shareholders and the general public. From the perspective of outsiders, transparency can be defined simply as the perceived quality of intentionally shared information from the corporation.[1]

Recent research suggests there are three primary dimensions of corporate transparency: information disclosure, clarity, and accuracy.[1] To increment transparency, corporations infuse greater disclosure, clarity, and accuracy into their communications with stakeholders. For example, governance decisions to voluntarily share information related to the firm's ecological impact with environmental activists indicate disclosure; decisions to actively limit the use of technical terminology, fine print, or complicated mathematical notations in the firm's correspondence with suppliers and customers indicate clarity; and decisions to not bias, embellish, or otherwise distort known facts in the firm's communications with investors indicate accuracy. The strategic management of transparency therefore involves intentional modifications in disclosure, clarity, and accuracy to accomplish the firm's objectives.[1]

Standard & Poor's has included a definition of corporate transparency in its GAMMA Methodology aimed at analysis and assessment of corporate governance. As a part of this work, Standard & Poor's Governance Services publishes the Transparency Index which calculates the average score for the largest public companies in various countries.

Transparency International publishes an index of corporate transparency based on public disclosure of anti-corruption programmes and country-by-country reporting. Corporate transparency is also used to refer to radical transparency in corporate governance. Transparency Index calculated as the average score for the largest public companies in various countries.

Corporate transparency is also used to refer to radical transparency in corporate governance.

Customer support transparency

Corporations may be transparent to investors, the public at large, and to customers.

Opening up the customer support channels may mean using a feedback tool which allows users to publicly vote on new developments, having an open internet forum, or actively responding to social media questions.[2]

See also

References

  1. ^ a b c Schnackenberg, A., Tomlinson, E., 2014. Organizational Transparency: A New Perspective on Managing Trust in Organization-Stakeholder Relationships. Journal of Management DOI: 10.1177/0149206314525202. http://jom.sagepub.com/content/early/recent
  2. ^ Norris, Jon (2012-03-02). "The new, social rules of customer service". The Guardian. ISSN 0261-3077. Retrieved 2016-10-01.

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