corporate transparency

Examples of corporate transparency in the following topics:

• Setting Transparency Norms

  • Transparency in organizations is the extent to which its actions are observable by outsiders.
  • Transparency in organizations is the extent to which its actions are observable by outsiders.
  • Examples of decisions to increase corporate transparency include when a firm voluntarily shares information about their ecological impact with environmental activists; actively limiting the use of technical terminology, fine print, or complicated mathematical notations in the firm's correspondence with suppliers and customers; and avoiding bias, embellishment, or other distortions of known facts in the firm's communications with investors.
  • Wage disclosure is one particular area in which companies can practice corporate transparency.
  • Define transparency and identify how it is determined by organizations' communication strategies and practices

• Open Communication of Decisions

  • Transparency consists of operating in such a way that it is easy for others to see what actions are being performed.
  • Transparency means operating in such a way that it is easy for others to see what actions are performed.
  • Radical transparency is a management method where nearly all decision making is carried out publicly.
  • Corporate transparency, a form of radical transparency, is the concept of removing all barriers to—and the facilitation of—free and easy public access to corporate information.
  • This includes the laws, rules, and processes that facilitate and protect those individuals and corporations that freely join, develop, and improve the process .

• Defining Corporate Governance

  • Corporate governance is the system by which companies are directed and controlled.
  • Corporate governance is the system by which companies are directed and controlled.
  • An important theme of corporate governance is the nature and extent of accountability of people in the business.
  • Integrity should be a fundamental requirement in choosing corporate officers and board members.
  • Corporate governance deals with the conflicts of interests in a company.

• Sustainability Initiatives

  • Corporate sustainability is a business approach that creates long-term consumer and employee value by not only creating a "green" strategy aimed towards the natural environment, but taking into consideration every dimension of how a business operates in the social, cultural, and economic environment.
  • It also involves formulating strategies to build a company that fosters longevity through transparency and proper employee development.
  • Three key principles that should form the foundation of a corporate sustainability initiative are: transparency, employee development, and resource efficiency.
  • Transparency deals with the idea that having an engaging and open environment within the company, as well as the community, will improve performance and increase profits.
  • Local-based organizations and economies: This principle calls for durable, beautiful, and healthy communities with locally-owned and operated businesses and locally-managed non-profit organizations, along with regional corporations and shareholders working together in a dense web of partnerships and collaborations.

• Corporate Social Responsibility and sustainable development in the global environment

  • The topics surrounding Corporate Social Responsibility (CSR) have become more complex due to the globalization of the economy and the issues that arise from companies competing in international markets.
  • Cases like this, and others such as Enron Corporation and Worldcom in the United States, prompt concerns about corporate governance and accounting standards globally.
  • Further, corporate fraud puts into question one of the fundamental reasons of why shareholders invest in public companies, the need for transparency.
  • Corporate Social Responsibility (CSR) is a concept whereby companies integrate ethical, social, environmental, and other global issues into their business operations and in their interaction with their stakeholders (employees, customers, shareholders, investors, local communities, government), all on a voluntary basis.

• Conflicts Between Managers and Shareholders

  • The "agency view" of corporations argues that the decisions rights (or control) of a corporation should be entrusted to a manager, so that the manager can act in the interest of shareholders .
  • Shareholders, on the other hand, are individuals or institutions that legally own shares of stock in a corporation.
  • Research of this type is particularly focused on how corporate governance impacts the welfare of shareholders.
  • After the high-profile collapse of a number of large corporations in the past two decades, several of which involved accounting fraud, there has been a renewed public interest in how modern corporations practice governance, particularly regarding accounting.
  • Disclosure and transparency are intertwined with these goals.

• Corporate Fraud

  • The Enron Corporation declared bankruptcy in 2001 and became the universal symbol for corporate fraud.Enron managers created Special Purpose Entities (SPE) with the sole purpose to wipe debt and liabilities from Enron's financial statements.A Special Purpose Entity consists of a company or subsidiary of the corporation.A SPE could be a shell company, where the company does not physically exist, except on paper.
  • Countries differ in corporate structure and planning.The U.S. corporations usually focus on short-term profits, and thus, they have problems with corporate fraud.On the other hand, the Japanese plan long term and they form a Keiretsu, a conglomerate of many companies with a bank member.Consequently, the bank could grant low-interest loans to its partner companies, and the Keiretsu usually focuses on long-term profits and market shares.Furthermore, corporations in South Korea, Germany, and Russia also established conglomerates, which are similar to a Keiretsu.
  • Some corporations suffer from the principal-agent problem, when two related parties have different incentives, creating conflicts and odds with each other.For example, the corporate structure separates the managers from the owners (i.e. stockholders).Stockholders select managers, who maximize profits, maximize the return to the shareholders and/or increase shareholder value.However, managers may not act in the best interest to the owners.They want high salaries, generous benefits, luxurious offices, and access to private planes and Limousines, reducing the return to the stockholders.
  • The U.S. investment banks, for example, were partnerships before the 1990s, and the managers handled money carefully.They were both the principal and agent.Then the managers converted the investment banks to corporations during the 1990s, and the managers gambled and took high risks while the shareholders owned the corporations.Investment banks became involved in the mortgage market in the early 2000s and were caught in the mania of the U.S. housing bubble.When the bubble deflated, the shareholders lost their stock value during the 2008 Financial Crisis.Finally, for one perverse example, GM cancelled its stock, and the shareholders lost everything during 2008.Remember, the corporate managers represent the shareholders and run the corporation on their behalf.
  • A family who dominates a corporation could reduce the principal-agent problem.For example, the Walton family is the majority shareholders who actively manage the Wal-Mart Corporation.Microsoft was similar, when Bill Gates was both the CEO and majority shareholder.Consequently, they become both the agent and principal, and they have one united interest - to earn profits.Thus, these companies earned high returns, and managers have better vision and oversight over their corporations.

• Social Responsibility Audits

  • In most countries, existing legislation regulates only a fraction of accounting for socially relevant corporate activity.
  • In consequence, most social, environmental, and sustainability reports are produced voluntarily by corporations themselves and are not held to the same legal standards as financial reporting, for example.
  • Having third-party groups conduct social audits is one way that corporations are held accountable for their CSR performance.
  • An audit for economic and governance responsibilities might look at transparency and the use of practices such as independent board members and separation of the roles of CEO and board chairman.

• Humanitarian Efforts

  • Aid is funded by donations from individuals, corporations, governments and other organizations.
  • With humanitarian aid efforts sometimes criticized for a lack of transparency, the humanitarian community has initiated a number of inter-agency initiatives to improve its accountability, quality and performance.

• Types of Organizational Branding Deliverables

  • At the same time, implementing the practice of clear and transparent communication can empower employees and prevent misunderstandings and mishaps.
  • Other information deemed relevant to stakeholders may be included, such as a report on operations for a manufacturing firm or corporate social responsibility reports for a company with environmentally or socially sensitive operations.
  • This type of marketing or communication strategy can also create a sense of transparency between the organization and the public and investors.
  • Internal memos can be a great way to build and maintain a positive and transparent relationship between organizational leaders and other primary or internal stakeholders.