At a time when information is widely accessible and easily shared, the message is clear: transparency is more important than ever.
Transparency has been in the spotlight for some time. Politicians and business leaders often talk about ways to improve it. Regulators and other stakeholders use it as a means to increase accountability of corporations and other organisations.
It is supposed to reduce not only information asymmetry, but also misbehaviour and even the cost of capital.
Some now argue that we have moved to the age of hyper-transparency. Others talk of radical or extreme transparency.
All this suggest that there is an increase in the availability of information – information that is either volunteered or obtained by other means.
These days, there are vast amounts of information coming out of organisations without their permission. We are becoming accustomed to reports of leaks, hacks and data breaches exposed by WikiLeaks and famous whistleblowers.
We even have cybercriminals accessing emails and information from high-profile organisations such as the CIA and FBI.
"The simple reality is that we behave more ethically when we think we are being watched."
At the same time, we see the rise of available platforms that enable all of us to comment – anonymously or not – on our employer, restaurant meal, doctor or mechanic.
All of this points to the fact that organisations are increasingly unlikely to be able to control their own information or information about themselves.
Professional Ethics: a practical guide
What does transparency mean for ethics?
These developments about the creation, distribution and control of information have enormous implications for ethical behaviour.
They create duties in relation to privacy and safety. They create expectations around responsibility and accountability. They provide evidence about who knew what and when, as well as motives and motivations.
The fact that the behaviour of organisations and their employees can so easily be made public means that secrets – particularly when they involve misconduct – are impossible to keep hidden for long. When they blow up, we find ourselves asking: what were the perpetrators and those who knew but did nothing thinking?
Transparency can and should result in more ethical behaviour – the simple reality is that we behave more ethically when we think we are being watched.
We may all agree that ethical behaviour should not be influenced by whether or not we think we might be found out, but research proves otherwise.
IAASB aims to make auditor reports more transparent
For years, we have been using the newspaper test to motivate ethical thinking and behaviour: think about your actions being on the front page of your local paper ...
Now we need to shift to: expect that all you do, every statement, email, photo and conversation will be made public – not only to your local community but to the whole world, and potentially it will remain available forever.
What does that do? How would directors on boards, managers and employees behave if this thought prevailed at all times?
To feel watched and transparent should not make a difference, but it does.
Dr Eva Tsahuridu is CPA Australia’s policy adviser, professional standards and governance.
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