Disclosure Is Not Transparency
Most people see transparency as a good thing, and disclosure an obvious way to get there. Often, we don’t distinguish between them.
But they’re not the same thing. And confusing them just lets bad behavior sneak back in through the back door.
What’s the difference between disclosure and transparency?
Transparency and Trust
Besides “able to transmit light,” the dictionary defines transparent as:
- easily seen through, recognized, or detected: transparent excuses.
- manifest; obvious: a story with a transparent plot.
In the simplest business terms, “transparent” means you can tell what’s going on.
If the link between transparency and trust isn’t self-evident, here are a few citations to help clarify it:
- Former PwC Chairman Sam DiPiazza and Harvard Business School professor Robert Eccles wrote in Building Trust: The Future of Corporate Reporting about the critical role of transparency as a necessary, albeit not sufficient, key to greater trust in business at large;
- US Supreme Court Justice Louis Brandeis famously wrote, “Sunlight is the best disinfectant;”
- Bob Hurley, in his recent The Decision to Trust, makes transparency critical to one of his ten factors affecting trust;
- In my own work, transparency is one of the Four Principles of Trust.
If I can see what’s going on, I know that I am not being misled. Motives become clear. Credibility is affirmed. Transparency is indeed a trust virtue.
Disclosure
Disclosure is a time-honored tool of regulators to achieve transparency. Food and pharmaceutical manufacturers are required to disclose ingredients, medical authors are required to reveal payment sources, the SEC frequently proposes disclosure as a tool, and so on.
Certainly you can’t find out what’s going on if information is actually hidden. So disclosure is a necessary condition for transparency. But it’s hardly a sufficient one.
I don’t have much to say about the cost/benefit trade-off of greater disclosure in pursuit of transparency. Sometimes the benefit is obvious, other times not so much, sometimes not at all.
What’s more interesting to me is how the blind pursuit of disclosure can actually reduce transparency – even reduce people’s awareness of the distinction.
Over-Disclosure
Is it possible to have too much disclosure? So much disclosure that information gets lost in the blizzard of data?
On the face of it, disclosure is the handmaiden of transparency. But if disclosure becomes the end rather than the means, if regulators and consumer advocates become fixated on indicators rather than on what they indicate, then disclosure can actually become self-defeating.
Lawyers know that massive responses to discovery requests can overwhelm opposing counsel. Cheating spouses know that the best lies are those that disclose the most truth. Consumer lenders know to fast-talk the disclaimers at the end of radio ads, much like the small print on the ads and loan statements.
If disclosure isn’t accompanied by an ethos of transparency, it can be positively harmful. It is like crossing your fingers behind your back, taking movie reviews out of context, or word parsing a la “it depends on what the meaning of the word ‘is’ is.”
A trustworthy person, team or company will not settle for disclosure, but seek to offer transparency. A competent regulator will always remember that disclosure is just evidence. And a wise buyer will always look for the transparency that may, or may not, underlie the disclosure.
Trust relies on both data and intent.
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Charlie:
Maybe a good gut test would be to ask why are we doing this: “because it’s the right thing to do” OR ” because we have to.” There’s a world of difference there.
Sandy
Interesting contrast, Charlie. These were good distinctions. I am not sure if I missed it or not, but the central theme about transparency for me is not a contrast with disclosure, it is how and when to apply it. If anyone tries to convince me that it is always right to be 100% transparent, it will be a hard sell. For sure, a move in the direction of more rather than less transparency for organizations would be a good thing in almost all cases. I think we need to temper transparency with a few things like, kindness, empathy, judgment, and care. If you agree, then we have a gray area where transparency is a great way to build trust usually, but not in every single case.
For example, if a woman asks you if her dress makes her look fat, you might want to guard your response and not just blurt out “You-betcha.”
The real dilemma is deciding when to be transparent and when it is wiser to hold information, at least temporarily. There is the rub, because allowing judgment means that leaders can rationalize their way out of being transparent due to some faulty logic. My personal rule is to lean more in the direction of higher transparency and be highly skeptical when someone advocates not telling people something. Make the path of least resistance be letting information out and the high hurdle be the need to withhold, rather than vice versa. Would you agree?
Bob Whipple: MBA, CPLP
CEO Leadergrow Inc.
http://www.leadergrow.com
585-392-7763
[email protected]
Sandy, I think that is an excellent gut test; compulsory vs. voluntary.
Bob, thanks so much for logging in here to comment. I find myself largely in agreement with you, and what it points out to me is that the “trust” field, an area in which both you and I work, covers an awful lot of ground, with a lot of words.
I tend to use “transparency” as referring to policies, organizational openness, or access to documents. When it comes to persons, and whether or not they articulate their innermost thoughts, I tend to think of words like ‘truth-telling,’ or candor, or intimacy, or honesty.
There’s no right or wrong about any of this; all those words can and are used to refer to both organizational and personal attributes. But it’s a useful distinction to make.
I note that both you and I say, in your words, “a move in the direction of more rather than less transparency for organizations would be a good thing in almost all cases.” I agree.
Your counter-example of the dress and the maybe-fat woman is a classic case of the personal. And I agree with you that those are tougher cases.
It’s interesting to read a now five-year old blogpost I did about Brad Blanton, one who believes in radical truth-telling. I suggest that most of us disagree with him, but we’d be hard-pressed to justify just why. More at:
http://trustedadvisor.com/trustmatters/trust-and-radical-honesty
An even more challenging standard for personal openness comes from my friend Phil McGee, who says words to the effect of, “brutal honesty is an oxymoron.”
Thanks for contributing greatly to the dialog.
Interesting stuff, Charlie. I agree my example was of a personal nature, but the same logic holds true in an organizational sense. When the HR Manager advises that we not disclose an upcoming layoff until we have “all our ducks in a row” I think it is worth a challenge.
My observation is that when you treat people like adults and get an earned reputation for talking straight, they react well, even if the news is not good. When you try to manipulate facts and timing, etc. you end up tripping over yourself and destroying trust.
On Blanton’s stand, I am willing to bet that he does not always follow what he preaches, of course he would never admit that. If he does always say whatever crosses his mind, I am willing to bet he lives alone (or perhaps he has a dog).
Bob, good example, the layoff thing; I agree. And your point about a reputation for trustworthy behavior is certainly worth underlining.
As far as your bet that Blanton doesn’t practice what he preaches, I would take that bet. He’s a PhD psychotherapist and best-selling author, and is currently delivering seminars in Greece and Hawaii on radical honesty; I have no doubt that he practices what he preaches. Whether he lives alone or not is a good question, I can imagine it’s not easy to live with someone who conducts his life so rigorously on that principle, but I’ve no doubt he doesn’t lack for company.
I liked this a lot, very important distinction
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that is very good example. There are a lot of people can’t make difference about this case. Good explanation
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