Why Business Transparency is Important for Every Company

by Perjan Duro, Founder

There are a lot of reasons for an employer or a company to withhold information. For instance, some piece of data might be so delicate, that the very prospect of the competition learning about it might be devastating. On the other hand, sometimes, the sheer volume of information might be so great that sharing every piece of information with absolutely everyone might seem like too much hassle. Finally, there’s the issue of vanity and self-confidence, seeing as how some members of your staff or audience might feel as if they are treated unfairly in a situation where they get a glimpse of what other people are getting.

Nonetheless, the lack of transparency that comes from pushing these practices too far can be completely counterproductive. For instance, a person in charge of an important task might not be able to complete it successfully due to the fact that they don’t understand what they are supposed to do.

Furthermore, sometimes, the lack of knowledge of other people’s tasks might result in worrying about the bigger picture. Needless to say, this is not something that plagues only senior management, seeing as how even the entry-level employees might become concerned with these issues. With this in mind, it is more than clear that business transparency is important for the functioning of your company and there are several reasons why.

1.Transparent performance estimation

One of the first mistakes that companies make is withholding information about the performance of their employees. Sure, through these estimates made by the HR, the management knows exactly what to expect from each employee, however, this could potentially cause more trouble than it’s worth.

How are your underperforming employees to know that they need to try harder to keep their job or earn that promotion if you don’t tell them? In order to prevent people from comparing their performance to those of their colleagues, you can make a compromise and give everyone an estimate of their own performance. This also helps you avoid putting up a performance chart, which usually tends to backfire.

2.Protecting your shareholders

In a situation where your company isn’t a sole proprietorship, but has shareholders with smaller or larger stakes in your company, you need to find a way to protect and reassure them. In order to establish how the company is to be governed, you need to make an ironclad and transparent shareholder agreement. There are plenty of simple templates that you can download from the internet, although it would be wise to have a lawyer examine it upon completion. Apart from stating the rights and obligations of shareholders, it also protects minority shareholders, which makes them more confident to invest further.

3.Boldness encourages partners and investors

Trust is, beyond doubt, one of the greatest assets in the business world. Now, a lot of business people are too careful in their interactions with partners and investors, which gives away an impression of them being dishonest even when they are not. Speaking up your mind and telling your investors something they wouldn’t like to hear may sound counter-intuitive, but such bold moves are usually something that trust is built upon. In their mind, you will become a person or an organization that always speaks their mind when something is wrong, which will make them feel much safer doing business with you. Of course, it goes without saying that being too bold could, at times, backfire.

4.Encouraging transparency in the workplace

At the end of the day, you need to keep in mind that keeping things a secret goes both ways. As a leader, you are setting an example, which is why encouraging transparency in the workplace might give a surprisingly positive result in the long run. For instance, by encouraging your employees to be open about areas of your work that need improvement, you will get an invaluable feedback that will improve your company structure dramatically.

Additionally, by making yourself available, you will ensure that you always learn of a pressing issue in time. Finally, by making your company’s goals transparent, you will ensure that everyone knows what they are working towards. In other words, by giving your employees a glimpse of the bigger picture, they might gain a better understanding of their current role in your organization.


At the end of the day, business transparency is one of those essential components that can make or break your business, yet it is not a topic you are bound to encounter too often. The reason behind this is mostly the fact that the issue is still fiercely debated, seeing as how there are numerous pros and cons that are equally convincing. To make the long story short, being transparent about absolutely everything can be as devastating as being too secretive. So, if you aim to make this trend work in your favor, you need to find a decent compromise and walk the thin line between the two as best as you can.

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