Wednesday, September 8, 2010

Building trust and the need for full ethical disclosure

The belief that “transparency results in responsibility and ethics” seems to be a new axiom for our time. Antonino Vaccaro and Joan Fontrodona, two ethics professors, writing in the Economist, argue that greater openness does not lead to better corporate governance. They say,

Today’s call for transparency is as simple as our mothers’ advice: lying is both bad and risky. In our complex corporate environment, failure to heed the spirit of this basic lesson—and taking comfort instead in sharing mountains of information as a means to ensure supposedly ethical behavior—leaves corporations and society exposed to lapses in responsibility and good citizenship.

They make a salient point, which I think offers useful guidance to the Legionaries of Christ in terms of their need to retain the trust of members and supporters - full, ethical disclosure is essential. The congregation has improved its communications with the outside world since I was a member, but still has lots of room for improvement. Heeding this advice, offered to the corporate world, ought to strengthen their resolve.

Full transparency is always associated with “data asphyxia” ....  It seems evident that a balance is required. But achieving that requires managers to construct a well thought out information strategy that takes account of quite a long list of economic, social and, yes, even ethical issues. Successfully addressing this ethical expectation is more than a source of competitive advantage; it is key to gaining the trust of employees, current and potential customers, partners, and even competitors. By the same token, attempts to hide potentially relevant information or, even worse, disclosing false or confusing information, could be catastrophic and companies in many sectors (from banking to biomedical) have experienced the heavy costs of being caught out in these dirty games

Solid advice, good for business and good for the Church.

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