Corporate transparency burdens organization It isn’t as easy. Transparency is something many leaders shy away from; the repercussions of people finding out their “secrets” could be detrimental to their companies.
From compliance to corporation tax, transparency is increasingly expected of businesses. The advantages of openness are many, and it can lead to greater loyalty from both customers and colleagues. But there are also downsides to more radical forms of transparency, which may result in a fractured workforce and even more secrecy.
Corporate transparency disturbs the work culture in the following manner
PANIC AND TENSION
Arguably, managers should keep their workforce insulated from corporate decisions, as being too open can cause employees
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Innovation will involve failure, and this does not look good on a balance sheet. A study by Shai Bernstein, assistant finance professor at Stanford, found that post-IPO, when they are required to make more company information public, businesses “find that the quality of internal innovation declines”. This view is echoed by Harvard Business School’s Ethan Bernstein. “A long stream of research tells us that in the presence of others, people do better on repetitive, practiced tasks, but worse on learning tasks that call for creative thinking,” he told the Harvard Business …show more content…
An analysis by LSE of transcripts from meetings of the Federal Open Market Committee indicated that “the knowledge of the expected publication of the transcripts drove the real deliberation out of the FOMC meetings and into unrecorded ‘pre-meetings’, with the FOMC becoming the place for reading of prepared texts”. If this is accurate, openness can be said to have eliminated the very kind of frank debate it was meant to uncover. Factors affecting corporate transparency in 21st century
• Ambiguous about what corporate transparency is
Bizarre clean chit to Indian corporate by Transparency International
Transparency International (TI), a reputed organization that measures the levels of corruption around the world, has come up with a report titled ‘Transparency in Corporate Reporting: Assessing Emerging Market Multinationals’, on corporate reporting in emerging markets. Its conclusions based on a ranking of three parameters—corporate anti-corruption programmers , organizational transparency and country-by-country reporting—will come as a shock to anyone who knows anything about corporate governance in India including disclosure and transparency. Tainted companies like the Vedanta come ahead of Infosys. Other dubious entries in the elite list include Reliance Industries and Suzlon!
Confidentiality has several different levels that include employee, management, and business information. Employee data includes personal identifying information, disability and medical information, etc. Keeping this material confidential is important because the information could lead to criminal activity to include fraud or discrimination; this can result in decreased productivity and affect employee morale. Management information covers impending layoffs, terminations, workplace investigation of employee misconduct, etc. It should go without saying that sensitive data should only be available to management. Lastly, the business portion includes business plans, company forecasts, and special ingredients/recipes, information that would not be readily available to competitors. Employees and managers should receive training on how to properly handle confidential information (Jules Halpern Associates, LLC,
Though the Securities and Exchange Commission rules governing selective disclosure and insider trading contain no provisions relating specifically to the health of executives, publicly traded companies must nonetheless manage the potential implications of their key executives’ health on perceptions of the company’s future success as well as their propriety in disclosing information material to investors. This can be a difficult task, as an employer disclosing particulars about an employee’s health seems to run contrary to the special privacy protections given health information in the U.S., yet such information can undeniably affect investors’ decisions. Recently, the Securities and Exchange Commission launched a probe to evaluate statements made by Apple, Inc. regarding the health of CEO Steve Jobs. While not yet a formal investigation, this unprecedented evaluation of health-related disclosures raises significant issues about how such information should be treated and how the rights of investors are to be weighed against the rights of executives. Additionally, if this practice becomes regular, it could lead to unfair and burdensome erosions of executives’ rights to privacy and medical autonomy.
In this climate of deteriorating government transparency, whistleblowers expose corruption to the public which may otherwise never come to light. In recent history, whistleblowers have been vital in revealing government corruption. In one of the first large scale leaks, “the whistleblower Daniel Ellsberg leaked US government files known as the Pentagon Papers, whi...
potentially make employees more hesitant to approach a situation they may see or know is
The term Whistleblower means “An employee who discloses information that s/he reasonably believes is evidence of illegality, gross waste or fraud, mismanagement, abuse of power, general wrongdoing, or a substantial and specific danger to public health and safety. When information is classified or otherwise restricted by Congress or Executive Order, disclosures only are protected as whistleblowing if made through designated, secure channels. (What is a Whistleblower?)” The idea behind whistleblowers is that they believe trying to inform the public of illegal acts within their businesses has the potential to protect the public from wrongdoing. The following studies analyze scholar’s findings on different factors related to whistle blowing as
Corruption consists in the illegitimate agreement between a corruptor and a corrupted, in which they abuse of their public power in order to obtain personal benefit. Bribery and corruption is something that has been going on for years. According to Allen, “officials perceive themselves as immune to any penalties for demanding and receiving bribes” which she states that it is one of the main reasons for bribery and corruption in underdeveloped countries. According to Transparency International, an organization committed exclusively to end corruption, three of the most corrupt countries in the world are Somalia, North Korea and Afghanistan. This does not mean that corruption is only seen in underdeveloped countries. In international business, corporate employees often find themselves dealing with corruptors in foreign countries and, in most cases, they will give in.
There are two types of transparencies: Regulatory transparency which incorporates controls on regulatory discretion, counsel with invested individuals and advance procedures that are clear, unsurprising and reliable. Information transparency is the giving of precise and “timely statistical data” as well as convenient warning of continuous policy discussions. ("Critical perspectives on international business: Vol 5, No 3", 2016) It needs to be transparent on how it spends the publics tax money and how they conduct their business. In 2012 South Africa was positioned second out of an aggregate of 94 countries for the transparency of its financial plan, however, in the 2015 review, South Africa was positioned third. ("South Africa Overview", 2016) The public and the business community need to have regulatory and information transparency so they can understand and make a precise evaluation of their rights and commitments. However, the final objective of the public sector transparency needs to make government policies reasonable and unsurprising to diminish the instability and expenses of “conducting public and private business.” ("Critical perspectives on international business: Vol 5, No 3", 2016) Transparency in the Private sector is the extent to which organizations customarily reveal substantial information about their financial condition and bookkeeping practices to “outsiders and the government in a reliable manner.” ("Critical perspectives on international business: Vol 5, No 3", 2016) Valuable numeric reporting supports the general productivity of the business sector and has the long‐term impact of lessening the expense of capital for companies. Incorrect or conflicting numeric reports brings down the plausibility of the private sector and discourage foreign contribution and cross‐border
The general meaning of transparency implies openness, or see-through, which is then applied to socio-politics with regards to accessing information and governmental records to better enable knowledge sharing and accountability. Finel and Lord (1999) define transparency as legal, political, and institutional structures that make internal information about a government and society available to actors both inside and outside of domestic political systems. According to Ann Florini (1998; 2002; 2008), transparency is the opposite of secrecy and a choice encouraged by changing attitudes about what constitutes appropriate behavior. Gupta (2008) and Mason (2008) further highlight the complex, contested, and important nature of transparency as a tool
Enron was one of the major energy corporation in America before it went bankrupt. A contributing reason to Enron’s failure was a lack of ethical management. Enron scandal proves that the company infringed the transparency, dignity and responsibility ethical principles of the Global Business Standard Codex (Paine et al. 2005). Effective management practices help businesses manage risk by reducing the likelihood of breaching the misconduct, but ethical dilemmas cause illegal or immoral activities.
secretive as the business itself. That is why I am motivated to go into an
Conflict of interest is a big problem between Enron and its auditing firms. It is believes that Enron’s auditors was hide many information and external auditors never aware or hide the losses in Enron. From audit committees to transparency committees would increase the likelihood that a firm’s key business ricks are transparent to investors (Healy & Palepu 2003, p. 21). Besides, a transparency committee can also help with internal auditor appreciate its primary responsibility lies with the board, not for personal interest and pleasing the leader.
Complete transparency in the workplace also creates loyalty between employers and employees. The reason for this is because employees have a stake in how well the company does, so when they are trusted with information it creates a sense of loyalty that strengthens relationships between everybody in the company. This is why some people advocate for mandatory disclosure sessions, in order to strengthen bonds between employers and employees, (Estklund, 2011).
More recently, researchers have begun to test some of these long-established theoretical hypotheses using new cross-country data. Indices produced by private rating agencies grade countries on their levels of corruption, typically using the replies to standardized questionnaires by consultants living in those countries. The replies are subjective, but the correlation between indices produced by different rating agencies is very high, suggesting that most observers more or less agree on how corrupt countries seem to be. The high prices paid to the rating agencies by their customers (usually multinational companies a...
Every citizen wishes to have a country where there is transparency. A transparency - that shows the unity and equality among the law, the officials and, of course, for its people is what most of them desire; that can somehow lessen the problems in supporting the needs of others; that helps to broadcast the income and the expenditures of the country; that warns its people that they are living in a democratic country; a way for the nation’s citizens to see the activities of the elected officials; and, of course, a key that somehow lessen the corruption in the government. However, even this transparency is being practiced the saddest part is that, not all officials are aware of this. This is the reason why corruption in the Philippines is one of the major dilemmas that they are still facing.
Based on this article, Malaysia involved in the economic crisis in the end of 1997. The Malaysian economic downturn exposed the consequences of poor corporate governance and prompted the formation of a high level Finance Committee on Corporate Governance (FCCG). The main focus of FCCG is to review and reform corporate governance in Malaysia comprehensively. In order to make a reformation, FCCG has played their role by sets out the principles of good corporate governance for Malaysia as a guideline and also proposes the code of best practice for companies. All of the recommendations of these principles are to strengthen laws, enhance disclosure and transparency, promote effective enforcement and emphasis on training of directors. Malaysian Code emerged from an urgent demand for businesses to exhibit greater transparency and accountability as it is largely modeled after the UK Codes. In UK, listed company under London Stock Exchange must disclose in their annual report the extent of compliance. The Hampel report’s main objective is to produce a set of general principles that allow flexibility in interpretation. Then the UK Code Combined derived from the Hampel report. So, there are similarity that we can see here when all companies in Bursa Malaysia are al...