Transparency in Business ^Featured

One thing that has always bothered me is the Sunday the pastor decides to talk about finances. Rather than give a homily about the gospel or explain how we can live by the Bible’s standards in today’s world, he talks about money. Specifically how much he expects us to cough up for the diocese.

The pastor starts with a joke that isn’t funny and proceeds to tell us all about what the diocese has determined is our “fair share” to donate during this year’s appeal. It used to be the Thanksgiving Appeal and then the Mission Appeal. I don’t know what it is now, probably because I’ve tuned out once the “fair share” has been revealed. The thing is, we (the church community) have pledged tons of money for improvements on and building additions to our church. Our “fair share” has been given repeatedly.

But my biggest beef is that we receive weekly updates on how much we “owe” and that we need to keep giving in addition to regular church gifts and special collections BUT we never get any updates on where the money goes. How much there actually is and what it is used for is a mystery.

Recently, the pastor retired and a new one was assigned. He inserts statements that outline all of the church’s income and expenses. Finally. Transparency.

In business, it is incredibly valuable to have a transparent organization. Let’s talk about management transparency. Employees want to know what management is doing. They want to know that management understands what they are asking of their workers and that they have experience and the ability to advise them accordingly. This kind of transparency leads to significant increases in employee job satisfaction and the ability of the company to attract top talent.

Management transparency has been studied and proven to be the number one factor in employee happiness and job satisfaction. The best news is that it costs nothing to implement.

As far as financial transparency, when comparing two companies, assuming they are very much the same, transparency can be the determining factor in success. If one of the companies offers clear, concise reports of their finances, and the other has more complicated and unclear reports, investors will likely be attracted to the transparent company. The more opaque financial company will be less attractive because investors are less likely to feel confident with the information being provided to them.

Financial statements that are vague and appear to be withholding information on debt or other information that is crucial to investors are likely to be in trouble. If the company’s risks are unclear, potential investors may shy away from it to protect themselves from the unknown.

Investors are seeking simplicity and honesty. If they know where a company is in terms of making money and how they are spending it, the more confident they feel about investing their hard-earned dollars.

Put yourself in the employee chair or the investor seat. Look at your company. Do you see things clearly or are there shadows in the way of a clear picture?