MyCIMA

Openness and Transparency v. Confidentiality and Commercial in Confidence

Posted: Thursday 17 November 2011 by Stephen Price
Replies : 2

In papers I have read and lectures I have attended on sustainability, there is a common theme that we need greater openness and transparency so all stakeholders can better judge the company and its directors, and the way in which it is being run by its directors.

This couls be pertinent to a 'green' investor, who wants to understand the policy in place. But in understanding sustainability poloicies, it is about understanding how risks of the future have been assessed including potential resource shortages, and how those are addressed.

But it is also important that you don't lay bare your commercial negotiating tactics, such that your openness might give too much advantage to your competitors.

When is it wise to disclose and when not? And if you choose to have an open policy, how do you counter accusation should there be criticism of some facts that were for good reason kept in confidence?

Good question

Posted by Nick Topazio on Monday 21 November 2011 15:55

There is no hard and fast answer that applies in all cases as it is a matter of judgement; and that judgement will vary from company to company.  What I would say is that a lot depends on the point that you start.

If your opening position is 'why tell them anything unless we have to' then you are bound to end up in a different place than if you start the process with the view 'let's be open and honest about our past performance, current position and future plans to the maximum extent possible without affecting our competitive position in a material way'.

And, by the way, many organisations would be surprised to find out how much of their 'competitive' information is already well known by their competitors.

 

Assume an intent for greater transparency

Posted by Stephen Price on Monday 21 November 2011 17:11

For those who only want to comply, one might suspect that they are going one step further and are holding back information that they should be disclosing, such as contingent liabilities.

For those who want to open up, there are some disclosures that might be considered detrimental to disclose. I was wondering what others might consider those to be; and on reflection whether disclosure really would be detrimental, or might enhance there reputation and ethical stance.

When contracting with Government, disclosure / embarrassment at what individuals are paid while working on certain projects might see people being paid and charged at more reasonable rates, which will advantage those with the more ethical policies.

What are your thoughts?