Naked Corporation How the Age of Transparency Will Revolutionize Business

Introduction An old force with new power is rising in business, one that has far-reaching implications for most everyone. Nascent for half a century, this force has quietly gained momentum through the last decade; it is now triggering profound changes across the corporate world. Firms that embrace this force and harness its power will thrive. Those which ignore or oppose it will suffer.The force istransparency.This is far more than the obligation to disclose basic financial information. People and institutions that interact with firms are gaining unprecedented access to all sorts of information about corporate behavior, operations, and performance. Armed with new tools to find information about matters that affect their interests, stakeholders now scrutinize the firm as never before, inform others, and organize collective responses. The corporation is becoming naked.Customers can evaluate the worth of products and services at levels not possible before. Employees share formerly secret information about corporate strategy, management, and challenges. To collaborate effectively, companies and their business partners have no choice but to share intimate knowledge with one another. Powerful institutional investors today own or manage most wealth, and they are developing x-ray vision. Finally, in a world of instant communications, whistleblowers, inquisitive media, and googling, citizens and communities routinely put firms under the microscope.Corporations have no choice but to rethink their values and behaviors -- for the better. If you're going to be naked, you'd better be buff!This conclusion may seem at odds with current thinking about corporate values and behavior. At the end of 2003 the corporate world was still weathering a crisis of trust on a scale unseen since the Wall Street crash of 1929. Many say this latest crisis proves that companies are worse than ever, and irredeemably so. For these critics, the corporate corpus isn't buff, it's obese.We believe the opposite is true. To build trusting relationships and succeed in a transparent economy, growing numbers of firms in all parts of the globe now behave more responsibly than ever. Disgraced firms represent the old model -- a dying breed. Business integrity is on the rise, not just for legal or purely ethical reasons but because it makes economic sense. Firms that exhibit ethical values, openness, and candor have discovered that they can better compete and profit. Some figured this out recently, while others have understood it for generations. Today's winners increasingly undress for success.Opacity is still alive and kicking; in some situations it remains desirable and necessary. Trade secrets and personal data, for example, are properly kept confidential. Sometimes openness is expensive. But more often, opacity only masks deeper problems. Armies of corporate lawyers fight openness as part of a good day's work. Old cultures -- the insular model of yesterday's firm -- die hard. Nevertheless, the technological, economic, and sociopolitical drivers of an open business world will prevail.Corporations that are open perform better. Transparency is a new form of power, which pays off when harnessed. Rather than to be feared, transparency is becoming central to business success. Rather than to be unwillingly stripped, smart firms are choosing to be open. Over time, what we call "open enterprises" -- firms that operate with candor, integrity, and engagement -- are most likely to survive and thrive.This is good news for all of us -- customers, employees, partners, shareholders, and citizens -- no matter what stakeholder hats we wear, because corporations have become so central to our lives and communities.Most of us are shareholders, whether directly or through pension and mutual funds. Our retirements hinge on corporate success.Because they own shares in the companies they work for, workers now think twice aboutTapscott, Don is the author of 'Naked Corporation How the Age of Transparency Will Revolutionize Business' with ISBN 9780743246507 and ISBN 0743246500.