The Grey Chronicles

2008.November.26

Transparency from the Top


Kate Pavao (2008) interviewed James O’Toole for the November 2008 issue of Oracle’s Profit magazine. James O’Toole, the Daniels Distinguished Professor of Business Ethics at the University of Denver’s Daniels College of Business, co-authored “Transparency: How Leaders Create a Culture of Candor” with leadership experts Warren Bennis and Daniel Goleman. The book consists of three interconnected esays tackling the issues of candor, integrity, ethics, legal compliance, and full disclosure.

  1. . Creating a Culture of Candor (Warren Bennis, Daniel Goleman and Patricia Ward Biederman).
  2. . Speaking Truth to Power (James O’Toole).
  3. . The New Transparency (Warren Bennis).

The following is an excerpt [emphasis supplied by this blog] from the interview and the book.


“. . . thanks to Enron and WorldCom and everything that led to Sarbanes-Oxley, and the increased use of the internet, particularly the growth in blogging, It’s become very clear not only that companies should not keep secrets but that they can’t.”

Annotations: A very good book on Enron’s case is available here. Blogging is no longer a phenomenon, but rather another medium which corporations could use to communicate with people— employees, stockholders and customers. Part of Web 2.0 technology, Facebook even was instrumental in electing the first Black-American president, see Farouk Olu Aregbe’s Facebook group named: One Million Strong for Obama.


“Creating a culture of candor is about more than open-door policies, an ombudsman, and whistle-blower protection . . . But what we found is that the people at the top of the organization have to set the tone. Day in and day out, executives must demonstrate to their employees that they are open to bad news, that they are listening to people who have important news, and that people are not going to be punished when they bring ideas or criticism—or even bad news—forward. It takes a tremendous amount of trust before people are really willing to speak up.”

Annotations: Transparency should come from the top. When positive qualities of top management are perceived at the bottom ranks, they become embedded in the corporate culture. Mutual Understanding comes from Mutual Trust.


“The only legitimate secrets are those having to do with individual privacy, or the development of a new product or strategy. If all the financial and managerial information is available to everyone in the organization at all times, people at the top cannot cheat. . . Companies actually could save the millions of dollars it costs to do an internal audit just by making the numbers available. ”

Annotations: The NSC during the Wing Tiek and Hottick management were clouded with secrecy, whereby only the top executives knew then what was the real financial status of the company. It came as a shock to almost everybody when it declared a cessation of operations in November 1999 admist proposed backward integration plans, equipment and technological modernization, and employee value-enhancement programs.


“ . . a lack of transparency isn’t a product of capitalism or . . . business people who are bad. It is part of a long-standing problem having to do with human nature and particularly the nature of human in groups, of people at the top trying to hoard information or not listening to the people who have the information they need. ”

Annotations: People with key information are powerful individuals. Traditional schools-of-thought claimed: Information is Power; but with the advent of Open Source, Open Architecture, and Open Software, emerging paradigms state that Sharing Information is even more powerful! As a typical example, even in government, (Luhtanen, 2006) society transparency should be the rule and secrecy the exception. "Access to documents and an efficient information policy are just as important for making legislation and the legislative process more transparent and understandable to the . . . citizens. If a government does not trust its citizens, how can one expect the citizens to trust their government?" Corollary, this question is also applicable to corporate management.


Notes:

Pavao, Kate (2008) Speaking Clearly. Profit, Vol. 13, No. 4. USA: Oracle, November 2008. back to text

Bennis, Warren; Daniel Goleman & James O’Toole, (2008) Transparency: How Leaders Create a Culture of Candor. USA: Jossey-Bass, 13 June 2008 . 144 pp. back to text

Luhtanen, Leena (2006). Transparency at the core of democracy. The World’s First Freedom of Information Act. Finland: Anders Chydenius Foundation, November 2006. pp. 56-7. back to text

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