Transparency
January 12, 2010
The New York Times reported last week that Fidelity National Financial, the nation’s largest title insurance company did not tell investors of dozens of lawsuits accusing the company of participating in mortgage fraud. The company makes the claim that the disclosure is irrelevant in fraud disputes. C. Hugh Friedman at the University in San Diego said that reasonable investors “would want to know, and consider it important to know, that the company in which they were investing was paying out millions of dollars in claimed losses.
Transparency is highly recommended for good ethical management. It is sometimes a legal obligation. The Sarbanes-Oxley Act of 2002 raised significantly the standards of corporate transparency and accountability. The Foreign Corruption Practice Act (FCPA) allows what is called “facility payments” which must be occasional, small in value and must be disclosed.
Showing transparency and the disclosing of facts that may not necessarily be advantageous builds trust. We all know that we do not live in a perfect world and that people and companies make mistakes. Being open about them is always reassuring.
The opposite is true. The very fact of hiding something creates suspicion even if what is hidden is of no importance or of no consequences.
Transparency International, the leading organization that fights corruption worldwide chose its name well. Bribery and extortion are usually done in secret. Maybe the founders were inspired by the quote in Scriptures that says: “but men loved darkness instead of light because their deeds were evil.” Very often, light is the best disinfectant.
Sometimes non-disclosure of confidentiality is a legal obligation or highly recommended. The CIA, for instance would not be able to operate if transparency was the norm or required.
Transparency is not an absolute value and has its limits. Does anybody have absolutely “nothing to hide?” I doubt it. Privacy is an important value as well. There are such things as secrets and they should be kept. Today, in my opinion, we are exposed to too much of people’s private lives. Celebrities and now, with reality TV, just about anyone is ready to reveal to the world what should remain most private.
What are the guidelines to determine what should be revealed and what should not?
1. We should be aware of our legal obligations and consult an attorney when in doubt.
2. We should be clear as to our motivations for either transparency or secrecy.
3. We should think of the consequences, both for ourselves and for others before taking action.
Felix Adler, the founder of the Society for Ethical Culture once said:
“The hero is the one who kindles a great light in the world, who sets up blazing torches in the dark streets of life for men to see by. The saint is the man who walks through the dark paths of the world, himself a light.”
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