Business transparency: How to create an environment of trust
What is transparency in business? Quite simply, you can define business transparency as being open and honest with all stakeholders – employees, customers, suppliers, and the community at large. In this article, we will explore what transparency means for business leaders and how they can create an environment of trust within their organisations.
What is the importance of transparency in business?
There are many benefits that transparency can bring to a business, such as building trust, creating loyalty, and improving your bottom line. Customers who feel they can trust a company are more likely to do business with them.
Employees who feel valued and appreciated have higher employee engagement and are less likely to leave the company.
All things considered, business transparency increases employee morale and boosts engagement and employee retention. It also encourages investments by demonstrating openness and stability. Taking into account objective feedback improves processes and, therefore, drives better results.
What’s the opposite of a transparent workplace?
A business that doesn’t value transparency develops a covert culture.
A transparent culture in business is directly linked to its leadership. However, complacency could play a role in the same way. If a company can’t adopt new ideas and get past the “this is how we’ve always done it” mentality, it will, sooner or later, end up in a covert culture.
How do businesses apply transparency?
Sharing behind-the-scenes content
One way to practice transparency with your customers is to show them more behind-the-scenes content about your organisation. This can be done via social media, newsletters, or blog posts. Sharing information can positively impact and build more trust with your customers.
Open sharing is a good idea if you wish to introduce the business values and company culture to a broader audience. This will help them feel more involved and connected to your business.
Another excellent example of business transparency is clear communication, whether it’s communication with your employees, suppliers, stakeholders, or customers.
If the management can undoubtedly share information and ideas, it’ll reflect in the performance and business success.
Making accountability one of the core values of your work culture will also bring positive changes. By encouraging accountability in the workplace, your workers can find the balance between respect and responsibility.
Transparent companies thrive on people taking ownership of their actions. This helps people to learn from their mistakes, builds trust, and teaches others that you can be relied upon to be truthful, no matter the circumstance.
How do you maintain transparency in business?
Once you have transparency in your business, it is crucial to maintain it by continuing to communicate openly and honestly, seeking feedback, and encouraging transparency throughout the organisation.
Transparent companies often create company policies and procedures to help ensure that your company remains transparent. Maintaining transparency can be challenging, but it is worth the effort, as it can help to build trust, create loyalty, and improve customers’ perception of your brand.
What are some examples of business transparency?
Transparency with employees
Good communication is the key to any successful relationship. This includes honest, two-way conversations between your employees and managers about various company operations, internal processes, and the company’s direction, as well as how it affects them personally – whether that means providing feedback for improvement or just being transparent enough so they can keep up with all aspects of productivity at work.
A transparent workplace fosters trust and open communication. Strengthening relationships between employees and their employers boosts employee performance and helps to nurture an environment of collaboration, where people are motivated to support each other and the company’s operations.
Transparency with customers
When executed well, transparency with customers results in elevated brand loyalty. When businesses are honest and open about their mistakes and shortcomings, they build trust between their employees and clients who spend money there instead of elsewhere.
If you want to achieve success with your customers, it’s important that they can see how and when the company responds to any feedback or inquiries — this includes being honest about mistakes, too!
When executed well – transparency leads to higher customer satisfaction, loyalty, and increased sales revenue.
Transparency with investors and shareholders
For investors, transparency is reflected in how freely they can access financial information like price levels and audited financial reports about a company.
Investors must trust that the organisation produces accurate, informative, and independently audited financial reports.
Transparency with the supply chain
When an organisation has internal transparency with its vendors and suppliers, it can closely monitor the sourcing process. Without knowing where materials come from or how they’re produced, there’s no way for businesses to ensure that what they’re purchasing will be both ethical and financially beneficial.
Supply chain awareness has grown a lot over the past few years, which also means that the industry is now increasingly scrutinized by governments, NGOs, and consumers, who are invested in the ethical sourcing of labor and materials.
How does the Legal Entity Identifier foster business transparency?
A Legal Entity Identifier (LEI) is a 20-character, alpha-numerical code based on the ISO 17442.
The Global LEI System (GLEIS) was developed by the G20 in 2011 in response to the 2008 global financial crisis to avoid any future global shocks of that severity.
The LEI code is essential for legal entities to create a more transparent global financial system. A company’s LEI will be publicly available through a global database and contain information about the company’s registered and trading names, company type, registered address, registration number, parent company information, and child company information.
After forming the G20 concept, the Financial Stability Board (FSB) appointed a new not-for-profit organisation, The Global Legal Entity Identifier Foundation (GLEIF), to oversee it. The foundation doesn’t issue the codes but leaves them to a network of public and private companies acting as Local Operating Units (LOUs).
To obtain an LEI code, you’ll need to reach an LEI Registration Agent.
LEI Register’s role is to provide you with verified information about LEIs, authenticate data and manage communication between LOUs. We understand the value of your time and have put in great work to become the fastest, most secure global registration service provider.