How businesses are giving importance to transparency to increase trust

September 28 was proclaimed the International Day for Universal Access to Information (IDUAI) by the UNESCO General Conference in 2015. In October 2019, the UN General Assembly also declared the same.

According to United Nations Development Programme (UNDP), "Universal access to information means that everyone has the right to seek, receive, and impart information."

Target 16.10 of the Sustainable Development Goals states, "Ensure public access to information and protect fundamental freedom, in accordance with national legislation and international agreements."

At present, AI and e-governance have the ability and contribute to bridging the digital divide that prevents people from accessing digital technology, internet, etc. Additionally, this year’s events focus on the importance of the online space for Access to Information.

Transparency in business communication

The honest, open, and straightforward communication that happens at various levels between a business and others, such as investors, stakeholders, employees, and customers, is transparency in business communication. This occurs irrespective of the nature of the information; be it good or bad, and is shared with all parties involved.

While once companies valued the secrecy of their growth and techniques, at present, people, especially potential customers, value transparency, which plays a crucial role in their selection of brands. This is because it helps forge stronger relationships with investors and stakeholders and also boosts customer-client relationships.

According to Business Wire, PayPal Holdings, Inc., Target Corporation, State Street Corporation, Intel Corporation, and Verizon Communications, Inc. held the top five positions in the fifth annual US Transparency Awards, announced by Labrador, a global communications firm specialising in transparent investor and stakeholder communications.

Here are three ways it helps businesses:

Trust building and loyalty

Providing open and accurate information about the company in all aspects helps build trust. When it comes to investors and stakeholders, they need to know what they are getting themselves into before investing or buying stakes in the company. This inspires trust and investor confidence, which also helps boost company value.

Additionally, having a consistent online presence that disseminates true and updated information with improved accuracy lets users know about company policies and other details pertaining to their needs.

For instance, in D2C brands, the availability of information regarding shipping and delivery charges prior to purchase helps customers make informed decisions. If there is no transparency in pricing, product availability, quality, sources, etc., customers would jump ship to a different company. Thus, it also plays an important role in maintaining customer loyalty.

Decision-making and setting realistic goals

It is important to know all the facts before making any decisions. Open communication occurs at various levels, from customer interaction to investor meetings. And if this decision must be taken by a team or in collaboration with investors and stakeholders, they must be made aware of all the details.

These include financial situation of the company, business trends within the company and other pertinent information related to the discussion at hand etc. Followed by which, the right decisions can be taken based on the company’s capabilities and it can be ensured that the goals set are not unreachable at their present situation.

Reducing risk

Sometimes business may not be going well. It may be due to various reasons, but acknowledging it and admitting mistakes, if any, helps create an understanding between the company and others. It can also help in gaining the needed support and preventing hasty decisions to mask these issues.