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Transparency may not be the cure. Same can be said about some medicines that they cannot cure by itself.
There is ,perhaps, no miracle cure for the Corruption. Transparency may help to some extent and any doubt raised about its use may make the disease more prevalent.
A minor step but it must not be dismissed as useless.
What will help is to spread the awareness of the symptoms and cause.

I wish the authors would have provided examples of the use of "transparency" that they complain of. In the circles I travel in, "trustworthy, relevant and understandable information" is a pretty good gloss for "transparent information". I can remember anyone looking at a 7 point, 50 page bank contract and remarking, "How transparent."

Good but obvious points, "transparency" is only effective if it allows an interested party to identify lapses in expected behaviors. Equating quality with quantity can be dangerous given, in most cases, the concepts have an inverse relationship.

Here is a truly radical place for all companies to start... reporting quarterly earnings honestly!

See “The Earnings Game: Everyone Plays, Nobody Wins” in the Harvard Business Review June 2001 which noted:

“The fetishistic attention to an almost meaningless indicator [quarterly earnings] might be cause for nothing more than amusement, except for one thing: the earnings game does actual harm. It distorts corporate decision making. It reduces securities analysis and investing to a guessing contest. It compromises the integrity of corporate audits. Ultimately, it undermines the capital markets.”

And, “SEC chairman Arthur Levitt, has called earnings management a ‘widespread but too little challenged custom.’ Empirical data appear to support Levitt’s position. A 1999 study of thousands of corporate earnings… found that quarterly earnings reports that meet analysts’ expectations exactly or exceed them by just a penny per share occur far more frequently than would be likely in a random statistical distribution… ‘It’s hard to find corporations that don’t pump up their earnings’.”

That exceptional candor was prompted by the Enron collapse, but since then nothing has changed.

The problem with disclosure is more severe than Drs. Fontrodona and Vaccaro note. For example, researchers at Carnegie Mellon have shown that disclosure has a licensing effect, such that those who have revealed their conflicts of interest upfront feel more justified in abandoning their fiduciary duties.

Remedy worse than disease?
Not ,in this case, unless Transparency is perceived as an ultimate solution.
Let the regulators exercise due diligence. They do not have to be cautioned about the ifs and buts.An enlightened media and Consumer organizations must play their part.
Transparency can be an important factor.

Transparency is an ingredient to achive trustworthiness. The dynamics of an organization should be as transparent as needed in order to be checked, critizised and questioned. That way you could convince and gain trust with all stakeholders.

Nothing like hiding in plain sight.

Transparency/truthfulness/basic bloody honesty do bring rewards to companies (and individuals) that practice it - over a longer term and consistently. Unfortuantely with equity markets dominaited by short termism begining in the openess business makes yourself a target.

Once shareholders start to pay attention and punishing corporates where the figures look good every reporting peroid; but add up to okay over the medium term. Then the message will get out fairly quickly - but I don't see it happening until fund managers have bonuses based on five year mean performance not 1-6 months. Breath holding is not recommended.

Transparency is visible. Truthfulness is hidden. The challenge is how to make truthfulness visible. By asking the right questions? By knowing whom to ask? By what measure? By what form of accountability, and to whom?

The Myth of Business Ethics.
En garde. Business ethics have become rather fashionable. Promoted by academics and repeated by politicians, managers, consultants and even radical-chic activists.... I enjoyed reading The Myth of Corporate Transparency (07Sep10) as a jokingly satirical piece which crystallizes the forces behind governance literacy. Our words are too often wrapped in mystery shrouded in an ethic. As a student of how we make decisions however my concern is that some might not catch the cleverness of that article. The word ‘transparency’ may come away with not a gloss but a taint. Not mentioned is the thread of transparency as a value, which in good governance is adopted as a principle, and applied as a set of practices. At each step there is the need for balanced thought. More importantly, all of this forms a critical governance couplet with accountability from which flows better information, effective communications, effective risk management, quality management, and personal growth.

That myth article is imbued with the credibility of academic credentials and respected journalistic publication. In the wrong hands, it may be cited for educational, business and regulatory simplicity and purity. Be happy -- our complex corporate environments , and indeed our corrupt society, will be more responsible and ethical, and less bad and risky, if we just always tell the truth. Cue the IPhone harps.

Truth? Those of us concerned with strategic oversight in informed, long-term sustainable decision-making tend to view truth as a relative thing. In a global village and international marketplaces operating in bricks and mortar and digital multi-player environments, with thousands of languages and hundreds of countries and dozens of belief systems, with global citizens and corporate citizens and new citizens, and old traditions and new life cycles, with new science and old science and new laws and old laws, and old organizations and new enterprises, and hybrid organizations and virtual organizations... truth? A respected judge was not being cynical when he observed that everyone is lying, the only differences are if they know it and by how much. Risk managers look to triangulate information from at least three sources, to improve the odds that truth, such as it is, is somewhere in the middle. These days its a four dimensional shape, with mass that changes over time. Truth as truthiness. Our only saving grace is information technology. Use it well.

Embrace complexity. No one said its easy, but the concept is simple. Like water -- it can be clear stuff in a glass or it can be part of a living ecosystem. I don’t need to know the chemistry, biology and physics of ocean systems to keep my clown fish Ollie alive, or to keep our salmon fishery vibrant, but it sure helps if I respect that I need to ask a few questions before making decisions about those things. Stepping up to living systems of a corporate enterprise or a hybrid enterprise of public and private interests, there is no common sense in governance.

Isn’t there an ethic about promoting informed accountability? I am all for satire and humour, but what if people think that transparency is really a plot about fully naked organizations and proven cures for corruption (not only for corporations, but all society)? That its all or nothing?

There is a difference between seeing your grandmother fully naked, and wanting to look in her eyes from time to time to see how she is feeling. There is a difference between seeing transparency as a cure for all corruption, and seeing it as a tool for improved effectiveness.

In the silos of our ever specialized lives, the mark of a professional is one who welcomes input and many eyes to create better products, including written, financial and performance. Yes transparency is the light and heat which may deter corruption, but for the other eighty percent of us just trying to get along it also provides critical information for us to do our jobs, better. As with any good governance value, it requires a respect for and balancing of diverse interests in application.

The conclusion of the Myth article indicates that the scourge of too much information is data asphyxia which leaves society and corporations exposed to lapses in responsibility and good citizenship. So everytime they want a drink of water they open a fire hose? So if some information is good, but not too much, how do we just get the trustworthy, relevant and understandable bits if we can’t see where its coming from? To their credit, in coming to their conclusions the authors do skip around concepts of balance and of how even PhDs have trouble understanding things at times. Respectfully, I am still looking for a means to ensure supposedly ethical behaviour. Perhaps someone could now clarify the myths of ethics, trust, relevance and understanding.

Although we should certainly try to develop a better approach to corporate governance and seek to reduce the possibility of corruption, it seems to me that we might be expecting too much on two counts. First, chances to eliminate corruption from the heart of (business)men are dim. Prospects for that have been derailed in Eden a very long time ago. It is of course noble and necessary to try to do something about it.
Second, it is incredibly hard to separate the legitimate informational asymmetry a company needs to compete profitably, and invest to create, from unethical/corrupt attempt to deceive and the related "lack of transparency".
In the present environment, it is chic to ask for greater transparency. I wonder, however, what would happen if onerous new mandates were actually enacted and enforced.

The tools of SOX and ISO support and remind the participants of those organizations the need to follow process and procedures. However, those tools are not the end all panacea. For at the end of the day they are reminders for doing the right thing, but they don't make you do the right thing. It still comes down to individual decision making. Hopefully, the note cards of SOX and ISO are enough to lead them down the right path.

Although I agree somehow with the authors, this is one of those what articles without enough emphasis on the how.

I think it is vital for companies to address the definition of transparency in their business and in consultation with their stakeholders.

Transparency is influenced by many factors some of them legal, some intellectual capital driven and some required by stakeholders.

In my opinion this dialogue should consider what is meant by voluntary, involuntary and mandatory disclosure.

The benefits for a company that becomes more transparent includes the closing of information and perception gaps, likely increases in share price values (because stakeholders such as analysts will perceive the difference between importance of certain information and the degree to which it is reported); better understanding and ultimately improvement of the trust factor in business relationships.

The problem lies in how to improve transparency. One way to impact on transparency is to adapt some traditional models of interpersonal communication such as the Johari Window for use in an organizational context. This communication model—developed by Joseph Luft and Harry Ingham in 1969 helps people improves interpersonal interactions through assessing the ways in which they give and receive information.

Within the context of transparency in organizations, the Johari Window can help— also through open two-way communication. If Directors understand this concept, they will be more inclined to want to become transparent. But first, it’s important to understand how the model works on a personal level.

The Johari window is a grid divided into four regions that represent different types of information exchanged during communication. The basic concept of the model is that open, two-way communication can enhance interpersonal effectiveness:

Region 1, the Arena is the area of share information. When people share information and understand each other, their interpersonal relationships tend to be better. The larger the Arena (the more shared information), the more effective, productive, and mutually beneficial an interpersonal relationship is likely to be.

Region 2, the Blind spot, involves information that is known by others but not oneself. The Blind spot can damage interpersonal relationships because it’s almost impossible to truly understand people’s actions, thoughts, and feelings without knowing why they behave and think the way they do.

Region 3, the Facade, hinders interpersonal effectiveness in that the information in this area favors only oneself. Information in the Facade protects people from others knowing negative things about them. People might not share such information simply because they’re apathetic. But more often, it can be because they desire power and control.

Region 4, the Unknown, involves information that is unknown by others and oneself. The area of the Unknown has the most potential for creativity, if all parties are willing to work together to gather information.

In many companies, management may try to keep information from stakeholders for the same reasons that people keep information from each other in personal relationships: fear, power, and apathy. This creates a small organizational Arena and a large organizational Facade.

A large Facade favors companies and puts stakeholders at a disadvantage. This often leads stakeholders to distrust, dislike, and even sabotage change initiatives such as mergers. In addition, a Blind spot can form when managers are unaware of stakeholders’ thoughts and feelings.

The Johari Window can be adapted to help organizations to become more transparent by enhancing communication. It’s important to expand the Arena along the two axes, Feedback and Exposure, which are, pivotal to effective communication. Exposing more information to others expands the Arena along the vertical axis. Increasing feedback expands the Arena along the horizontal axis.

How to use the model

This model can serve as basis for the development of a strategic communication plan that will take into account proper stakeholder profiling research (Identification, information need research and media and the development of a communication – strategy matrix that will take into account individual stakeholder needs and interests).

Every person tunes into one radio station – WIIFM – “What’s in it for me?” By improving organization communication initiatives with stakeholders, they will be more willing to listen to issues that affect the organization, and they will most likely be more willing to support the organization.

Sir:
I agree with the gist of this ideas in this article. Too much of a good thing is dangerous. So too much information, too much data points, too much meetings and briefings are dangerous. Thinking through this differently, transparency could mean information that has very little if anything to do with current corporate performance or future goals. So the question is, "How much of the 'transparent'"information we are receiving from companies is truly relevant?"

Well I think whole point transparency is that people at large can check what is claimed is true. Good governing comes from having good managers. But there is no other way to know who is good or bad manager without transparency.