Why transparency is really not that simple

It's the right thing to do, but it's not hard to see why bosses don't want to go public when scandal hits.

Last Updated: 04 Oct 2018

Imagine this. You are CEO of a multinational organisation. It is leaked internally to you that some of your employees have been found to have committed indecent, illegal acts that will directly affect the reputation of the entire organisation.

With the weight of an already alarming crisis on your shoulders, is your first instinct to go straight to the media and thus broadcast the scandal to the world? I’m sure many would agree, probably not.

In light of the revelations, there is no doubt that Oxfam bosses should have come clean about the actions of their employees in Haiti and in retrospect I’m sure they wish they had.

From the outside it is easy to call for transparency - it is the ethical and right thing to do. Unfortunately for those at the centre of the crisis, whether for the wrong or right motivations, it might not always be the obvious response.

To reveal something that can cause such damage to a company's reputation goes against every fibre of your  business sense. After all, one of the core purposes is to make decisions that are in the best interests of the company.

Ultimately, by going public and bearing all, you know there can be no positive outcome -  the senior resignations, Charity Commision investigations, rejection by donors and the permanently damaged reputation suffered by Oxfam in the fallout from the sex scandal only act as further indication of the possible toll.

Aside from the economic and operational consequences to a business, senior figures can be torn by potential social repercussions of being fully transparent. Scandals like that of Oxfam are highly complex events and impact the lives of people far beyond the event itself. Do you really want the responsibility for making it worse?

Christine Armstrong, MT contributing editor and co-founder of business consultancy and think tank Jericho Chambers, highlights the intense moral contradictions bosses have to decide between:

'Leadership teams are often torn between many conflicting interests: doing right by employees (even if some employees have erred, their families and colleagues have not, and opening the doors to what may be seen as the media wolves isn’t an easy option), potential damage to the reputation of the organisation (now and in the future), the responsibilities of the leadership team (no one wants to publicly admit that their leadership was lacking) and so on.'

She points to the suicide of former Welsh Labour MP Carl Sargeant in Nov 2017 - after he was dismissed following allegations of harassment -  as an example of the unintended consequences that can come with transparency.

'Doing the right thing takes a bravery and long-sightedness than can feel impetuous, even foolhardy, at the time.'

It isn't right, but with these consequences to consider it’s no wonder bosses can be tunnel visioned into silence.

For Robert Phillips, former Edelman EMEA CEO, transparency ultimately means accountability, which is not the easiest pill to swallow: 'Vulnerability (an open recognition of their own limitations) is rarely high-up on the CEO agenda.'

Difficult questions

In retrospect, it is easy to call it a cover-up, but for the management at Oxfam at the time, it's clear to see how they might have thought their response was adequate. An investigation was launched, the people involved sacked and the reputation of the charity was protected - at least short-term.

Would they have necessarily seen themselves as the bad guys in the situation?

There is no doubt that Oxfam bosses got it wrong, but if there is anything good that can come out of the scandal it is that it might force those at the top of organisations to rethink how they manage a crisis.

Big decisions come with big positions and executives are at the top because they are deemed to be the most capable decision makers. By taking the position they accept responsibility for the crisis and the hard choices that come with it.

Ultimately, when crisis strikes, you have to ask yourself the question, who do you have a greater responsibility to, shareholders or society?

Image credit: ra2studio/Shutterstock

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