What is corporate transparency?

Transparency denotes the quality of being seen through with ease. Whereas, transparency in the context of the corporate world refers to good faith and honesty. Corporate transparency is way more than just being the ‘right’ thing to do by the businesses. Transparency in the corporate world is extremely crucial when it comes to governance and anti-corruption.

Corporate Transparency is the need of the Hour

Every company, in some way or the other, practices transparency. Modern businesses are compelled to disclose their actions to an individual outside their organization to an extent, whether their goal is to meet the government’s rules and regulations or to inform shareholders. But there are many businesses who have taken the level of corporate transparency to a top notch by revealing in-depth information and data on their operations beyond what’s required in terms of legality and making it available to the masses. Historically, businesses would hide and protect this kind of information from the masses. This was done in order to safeguard the reputation of the businesses by preventing negative press and to protect the competitive advantages. Many businesses still have the same mindset, but many modern companies around the world have been promoting corporate transparency.

No sugar- coating when it comes to transparency

A company that follows the concept of corporate transparency does not sugarcoat anything for you, it lists out all its perfections and flaws which can range from the sustainability measures to the carbon footprints. In order to do the same, it publishes reports and enables access to information mentioning not only the success of its sustainability action plans but also the failed plans. The intention here is to be clear to the stakeholders about the actions and encourage them to take ownership of their role in it.

One good example of a company having corporate transparency is Vestas (Denmark), which is one of the largest wind turbine companies in the world. It publishes detailed sustainability reports on a day-to-day basis. These reports contain information regarding renewable energy projects, steps for reduction of carbon emissions and supply chain management.

Transparency is crucial for consumer trust

It’s obvious that a consumer would put more faith in a transparent company over a company that chooses not to disclose important information. According to a study done in 2016, 94% percent people are more likely to be loyal to a company which practices full transparency. It is somewhat like telling your secrets to a friend or sharing a personal story which allows them to feel closer to you.

The more transparent a company is, the closer a consumer feels. A company which is caught misrepresenting itself might lose the trust of its consumers and take years to build it back. Remember the noodles brand owned by Nestle i.e., Maggi? It was banned on June 5, 2015, by the Food Safety and Standards Authority of India (FSSAI) for containing excessive lead and mislabeling related to harmful monosodium glutamate content in its packets. It took years for Maggi to gain back the trust of its consumers.

Cooperation of companies to tackle global issues through corporate transparency

Corporate transparency can help the competitors to try to match or exceed the success of other companies in the corporate world. Similarly, it can also lead to cooperation between companies across industries to tackle issues such as global warming and climate change. Companies that are always at the forefront of promoting sustainability and green energy can motivate the rest of the companies to follow their footsteps which ensures that the rest of the companies do not fall too far behind.

Tata Motors boasts about having corporate transparency as per the international standards. It recently launched the car ‘Tata Punch EV’, an Electronic Vehicle (EV) which can help to reduce carbon footprints. We’ll surely see some competitors launch EVs with the same goal in the near future.


A successfully transparent company works as an example of how the rest of the companies in the corporate world should be. It builds trust of the investors and consumers and can promote competition in the corporate world so that the companies can catch up with each other and keep growing.

By Kashish

Content writer with a diverse portfolio spanning various subjects. With a seasoned background, I have been crafting professional content since 2019.

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