In these uncertain times defined by low trust in institutions, rapid technological change, social tension and ecological breakdown, business leaders should understand that the expectations, concerns and hopes of stakeholders has never been more important. Given that 85% of a company’s value today is made up of intangible assets such as reputation and goodwill, business leaders are looking to understand how to preserve and strengthen this value.
At its core, a corporation’s long-term success is dependent upon the quality of its relationships with a range of stakeholders—customers, investors, regulators, local communities, non-governmental organizations, suppliers and employees. Maintaining a social license to operate today and creating new opportunities tomorrow requires building greater trust with your stakeholder network.
GlobeScan’s recently-released White Paper, “Building Trust: Why Transparency Must Be Part of the Equation”, identifies a number of critical insights around the future of corporate transparency, especially as it relates to increasing trust in business at a time when this is sorely lacking.
1. Transparency builds trust
With trust in companies and government particularly low at a time when these institutions are critically needed to help create a more just and sustainable future, it is becoming increasingly important for companies to learn how to be more open and transparent. Transparency is one of the most powerful tools that companies have to build trust among their stakeholders.
2. Transparency is about leadership
As building trust in business enterprises is essential to creating a more inclusive and sustainable economy, senior leaders must summon the courage to commit to corporate transparency. Companies that work closely with industry, non-governmental organizations, academia, governments, local communities and consumers can lead on creating new standards of openness and candor that other companies can learn from, aspire to and work toward.
3. Transparency is evolving
Transparency will continue to be redefined as society’s standards for corporate transparency are evolving at a fast pace. Rapidly changing cultural norms will be driven by increasingly empowered stakeholders and by disruptive technological innovation that makes information more accessible.
4. Transparency enables stakeholders to hold companies accountable
As expectations for corporate transparency continues to grow, so too will stakeholders’ ability to hold companies responsible for their actions. Increased public scrutiny will likely push companies toward more responsible behavior, benefiting employees, consumers and other stakeholders.
5. Transparency enables companies to weather challenging circumstances
If a company does make a mistake that could be potentially damaging to its reputation, there is compelling evidence that it pays to be open and honest. By telling the story themselves in a truthful and candid manner, proactive companies can sometimes get ahead of detrimental information and may be able to strengthen their relationships with stakeholders.
6. Transparency is increasingly being driven by consumers
According to a GlobeScan global public opinion study, three-quarters of consumers worldwide expect companies to provide full transparency on their products and services. Consumers increasingly demand that the products are made with safe, non-toxic ingredients and materials with minimal negative environmental and social impact. Consumers increasingly demand that corporations take good care of their employees, including fair pay, good benefits and safe working conditions.
Buffer, a technology firm with a mission to help clients manage their social media platforms, is widely perceived to be a leader in corporate transparency. Buffer states that a “default to transparency” is one of their core organizational values. As employees, they view transparency as an effective way to work remotely and establish a culture of trust. As a team, they view transparency as an effective way to work remotely and establish a culture of trust. As a company, they view transparency as a tool to help others.
For Patagonia, providing transparency throughout its supply chain means they are committed to documenting social and environmental performance in a public manner. Lauded as a leader in corporate social responsibility innovation, Patagonia takes a proactive approach to ensure that social and environmental impacts are minimized over the lifecycle of their products. Patagonia’s goal is to ensure that products are manufactured under safe, fair, legal and humane working conditions throughout the supply chain. Patagonia demonstrates transparency on supply chain performance through a section of their website called the “Footprint Chronicles.”
When employees walk through the lobby of Apptopia Inc, a mobile-app market analytics firm, they pass a bank of large screen monitors displaying the kind of data that many companies guard tightly: monthly revenues, client numbers, customer churn. When employees log in to their computers, they can see even more, down to the status of every potential client relationship in the works. Apptopia CEO Eliran Sapir views transparency as a motivation for employees to keep the company moving forward. Apptopia is part of an emerging wave of companies embracing corporate transparency as they disclose their finances, performance data, and salaries for all employees to see as technology makes it easier to share information.
The International Living Future Institute’s Just Program is an organizational transparency platform and disclosure tool. The Just program provides an innovative and holistic transparency platform for organizations to reveal much about their operations; including how they treat their employees, their levels of employee engagement, where they make community investments and social performance within their supply chains.
In a similar fashion to the Institute’s Declare Program , the Just Program acts as a “nutrition label” for socially just and equitable organizations. This approach requires reporting on a range of categories including diversity and inclusion, equity in the workplace, employee health and well-being, employee benefits, community stewardship and supply chain management. Based on policy statements and corresponding data supplied across twenty-two indicators within the six categories in Just, a score is assigned to recognize increasing levels of performance. This performance data is then summarized elegantly on a Just label.
The Just Program has helped participating businesses better align human resource policies and practices with stated organizational values. Just-labelled organizations have found that the move to improve corporate transparency has deepened levels of employee engagement, loyalty and retention. In addition, when organizations candidly share insights about the need for improvement in specific indicators, they have found the disclosure process will often lead to powerful and productive conversations. These conversations allow the organization an opportunity to share power and accountability more broadly and make progress developing a high-trust culture.
As organizations begin to understand the need for a greater organizational focus on issues of diversity, equity, inclusion and employee engagement, the Just Program allows the participating organization to benchmark themselves against a robust third-party social justice framework. JUST Program participants can also benchmark their performance against competitors and against other businesses in their region. In addition, the Just Program offers participants a clear roadmap on how to demonstrate improvement in performance over time.
Randolph Meiklejohn, Principal at Goody Clancy, commented, “Our firm pursued the Just Label in order to reinforce the value of transparent business practices we had already implemented and to encourage our firm to do more. As a direct result of Just, the firm shared gender pay equity data for all design positions for the very first time.”
Shiloh Butterworth, Chief People Officer at PAE , noted, “The Just Label helped to reinforce our triple bottom line values and our commitment to People and Planet. With a clear focus on transparency, the Just program also inspired employees to openly discuss how we could get better and how we can drive more social change in our communities.”
Melinda Rosenberg, Partner at WRNS Studio, states, “Our firm’s success hinges on our people and we run our business with their interests at heart. The Just process helped us be more transparent about the good work we were already doing, while giving our firm the tools and a roadmap for improvement in other areas.”
Kim Shinn, Principal at TLC Engineering Solutions, states, “The employee engagement that is engendered through transparency generates a strong culture for continuous improvement that ripples through the organization, moving social equity indicators, as well as important business indicators like revenue growth and profitability.”
The Just 2.0 User Manual is available to all interested parties as a free download at https://living-future.org/just/. Organizations can begin to conduct a social equity in the workplace self-assessment to uncover relative strengths and weaknesses. Organizations can request the scheduling of an on-demand webinar so they can better understand the business case for increasing organizational transparency and making investments in employees, local communities and supply chains.
We are always eager to bring more organizations into the Just Program. If your organization is ready to move forward with a submission to earn a Just 2.0 Program Label, you can make a formal submission through the Institute’s membership portal. Organizations that intend to make a formal application can ask to receive a toolkit that will simplify and expedite the submission process. Please direct your request for the scheduling of an Introduction to Just webinar or to receive a Just 2.0 application toolkit to just.support@living-future.org.
