11 Advantages to Becoming a Transparent organization.

I was a little bit proud to hear that New Zealand had been declared the most transparent country in the world again by Transparency International, a shared spot with two other countries. It brought back memories of working for government departments in the dim, distant past and being assailed by the Audit department to review our work. 

Being audited was always an intense process involving having someone go through your work and your files with a fine tooth comb. Invariably, the audit would always highlight "areas for improvement" and there would be much discussion on how we would survive the next audit when it came.

Becoming transparent in our work is not some distant, unseen process that happens in the upper echelons of government leaders. We can tell that it is a permanent fixture when it becomes an attitude of mind, a given process that occurs in each and every department and in almost each and every organization. But why should we be proud of transparency in our organizations? I am an avid fan of both internal and external audits to increase our transparency and here are some of the reasons why.

1. Transparency engenders trust:  True transparency enables us to see everything in the open, warts and all and this openness engenders trust from both within and outside of the organization. When we are prepared to be scrutinized and to have our flaws examined then it sends the message that we have nothing to hide. It is the old story of "what you see is what you get." 

2. Transparency provides data for sound decisions: Investors, clients, staff and management are all able to make sound judgements when they have all the facts at hand. Hidden surprises can derail an organization or a service whereas transparency provides confidence that we can rely on the facts as presented. Of course, if being transparent throws up significant issues occuring within an organization then this may initially appear to reduce confidence. This can be overcome when a plan of action to address shortcomings is simultaneously presented with the report on issues, sending a clear message that mistakes lead to improvements.

If a governance board has access to clear and transparent financial information, its future decisions will be more considered. If management has sound, transparent data on staff functioning then it will be more able to target training and recruitment. If staff have clear, transparent information on their roles there will be less confusion, less overlap necessary and more efficient use of their time. And so on and so on......

3. Transparency promotes ongoing organizational improvement: It is difficult to address problems within our organization if we are blind to what is going on. The same attitude that seeks to hide those problems as they arise will also stifle efforts to improve. The beginning of any success in resolving difficulties lies in clear identification of the underlying problems. When an organization is regularly audited, whether externally, internally or both, then there is always data on which to base improvements. Transparency is an essential precursor to sound evaluation. 

4. Transparency enables the sharing of the load: As we become more transparent and more willing to share what is happening within an organization it is easier to determine when assistance is needed or when support of particular staff or the organization as a whole would be beneficial.  

5. Transparency is economically sound: On so many levels, transparency increases economic accountability and enables the more effective use of  limited resources. When there is no transparency, it is easy for resources of money, equipment and staff to be sidelined to ineffective, inefficient or even corrupt purposes. 

Let us not be naive that this form of corruption is only happening at government level. I have witnessed this occurring at an organizational level among nonprofits. Resources expended taking care of personal agendas or paying for whatever form of corruption bleed profits dry or, in the case of nonprofits, divert funds from where the needs exist.

6. Transparency engenders initiative and self-empowerment: The trust that transparency brings in turn encourages initiative and self-empowerment. If employees believe that their work is truly visible and acknowledged in regular processes of scrutiny, they are more likely to feel safe to test out their ideas and to use initiative unless an employee is worried about being exposed for non-performance in which case they are likely to look for a way to hide from the scrutiny. There is an oxymoron in the fact that the very environment that promotes self-examination and improvement implies that we are all fallible and not perfect in our work. We cannot improve if we are already perfect. A sound, transparent process does not vilify staff for poor performance but should provide an ongoing environment whereby improvements are sought after.

7. Transparency means greater clarification of roles: Where openness in business processes and information exists it becomes easier to determine the respective roles of each of the players. You can see the roles in broad daylight making it easier to negotiate transitions between roles, negotiate the distribution of responsibilities and to monitor workloads. Adjustments between roles are also so much easier because transparent processes will quickly make apparent where they are needed and the results of any changes put into place. 

8. Transparency attracts donors/investors: One of the key reasons why donors declare their unwillingness to donate to nonprofits is the fear that their funds will be inappropriately spent. The problem they experience so often is that they cannot truly see where their funding is being expended. An organization that is transparent may be able to establish the trust of donors because they are offering sound information on how their resources will be applied.  

9. Transparency means improved risk management: If our organizations are truly open in their processes then problems will quickly be recognized and therefore dealt with while they are still early on. Without the mechanisms of transparent processes, then developing problems may rest unaddressed for quite some time. It begins at the management level. If governance and management model secrecy through the environment and processes in place, then staff will follow the example and will hide any problems they identify. Conversely, if all messages within an organization communicate openness and acceptance of scrutiny then employees and volunteers at all levels are more likely to speak up if they identify a new issue.

Transparency provides the means for sound risk management. You cannot manage what you can't measure or see. 

10. Transparency keeps us focussed on our goals and objectives: Transparent processes provide a unifiying force and an ability to constantly refer to the mission and objectives of an organization. Data in transparent organizations has the capacity to be continuously gathered, analyzed and then used in decision making. If that transparency is geared towards alignment with organizational goals then true evaluation can occur at an effective level. All staff at every level are being held accountable for the achievement of organizational objectives.

11. Transparency promotes continuity of service:  I have witnessed so many nonprofits started up by energetic, charismatic and dedicated leaders only to falter when the leaders move on to other projects or retire. 

There is this policy I have termed the "what will happen if you fall under a bus?" policy. No-one is indispensable and leadership in organizations or nonprofits who hold tightly onto all information and control who sees what information are a great risk to continuity of service. Having transparent systems and processes as well as transparent accounts enables more simplified succession planning. A successor in any role in the organization should be able to pick up documentation that has been maintained in a consistent way and know how to work within the role. 

So given there is such a good case for transparency, why is it that so many nonprofits avoid it? How do we implement transparent policies and procedures into our organization? That is the subject of another blog.