Transparency

TRANSPARENCY

            Transparency is an issue that is relevant in, business, government, and even the private sector. Transparency can be used as an aid in crisis management, public relations, image maintenance, and public policy. Transparency can help inform publics, debunk speculation, create an image of integrity, and help facilitate discourse between an organization and its publics. The downfall of a policy of transparency is that it can also lead to increased scrutiny of an organization and its faults due to the fact that when things do go wrong everybody knows about it. For these reasons transparency is best used along with a policy of integrity; if you already have the trust of your publics, they will be more willing to overlook small issues and problems within an organization.

 

1. Summary (Hyundai Motor Co.) from the Wall Street Journal

Hyundai Motor Companies’ CEO retired. In a news release, they stated that he retired, who should be taking over, but not why he retired. This is an interesting case because they have shown partial transparency. The company was upfront about the change. They came out and made a release that the CEO was retiring. They also came out and said who is to be taking over the position and what this means to the company. The strange fact is that they did not address the reason for his retirement. This can be problematic because it leaves room for speculation that can cause scandal. In today’s world of instant media, rumors can spread faster than an official press release; therefore it would have been wise to address the reason for his retirement in the initial press release.

http://online.wsj.com/article/SB10001424052970204138204576602682341427992.html?mod=WSJ_article_comments#articleTabs%3Darticle

 

2. Summary (Iona College) from the Iona College News Releases

Iona College made a press release stating that they “…recently became aware of inaccuracies in student performance data reported to external agencies.” They further go on to state that they have started a comprehensive investigation by a third party auditing firm. Finnaly they promise that “[o]nce the audit is complete, all results will be shared with faculty, staff, and students.” This is an example of great transparency. The school does not even know the extent of the problem, but they have already come out to their probable affected publics with the information that they have and a promise for further information. The advantage to this approach is that it gives those that may be affected the assurance that they will not be left in the dark, and it gives little room for speculation to start.

http://www.iona.edu/news/releases/1112/0830inaccuracies.cfm

 

3. Summary (Netflix) from the Netflix Blog

This is a case of transparency being used to try and solve a problem that was created through a lack of transparency. Netflix recently announced that it was going to split it’s streaming and DVD by mail into two separate services; and the price would split too. This caused a lot of frustration among customers, a drop in the stock price, a major fall in new membership, and a flood of current members cancelling their membership. Essentially the company is just turning what was a single service into two separate services, each with its own price. The problem arose when it was announced, because there was no explanation for the change and it came across as a plan that would now cost almost double for the same service its customers were already receiving. Seeking redemption, the CEO of Netflix wrote a blog, and also sent an e-mail to every current customer stating “I messed up. I owe everyone an explanation.” These are some strong words to come from a CEO. He further explained “It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes. That was certainly not our intent, and I offer my sincere apology. I’ll try to explain how this happened.” Wow, the CEO apologizing to his publics and offering an explanation to them. This is an attempt at transparency to manage a crisis. An interesting aspect to his approach is that he wrote a blog and sent an e-mail. This was not a formal press release, given before a crowd of media types and on the six o’clock news; this was the use of social media to try and give the appearance of being personal. This was the first step in his attempt at rebuilding a relationship of trust with his customers and transparency was the approach he used.

http://blog.netflix.com/2011/09/explanation-and-some-reflections.html

 

4. Summary (NYPD Ticket Fixing) from the New York Times

This is an example of a total lack of transparency. The New York Police Department is currently in the process of investigating ticket fixing by its officers. The New York Times, the Westchester Guardian, the New York Daily, and other news outlets have all reported on the situation; however the NYPD has not offered any official release as to the situation. This has led to speculation and accusations that may or may not be valid. For example, the New York Times printed that “The suspected leaks may be the most damning of the departmental weaknesses unearthed to date in the ticket-fixing investigation. The leak accusations seem to lend support to the argument, long put forward by many current and former prosecutors and police officials as well as academics, corruption experts and politicians, that the Police Department is incapable of policing itself.” There are strong words coming from everybody but the department itself. Due to the lack of any transparency, the story and scandal can continue to spread like wildfire. This is why transparency should be considered standard practice within an organization. Without any transparency people are free to make any claims and assumptions they want due to the lack of official information refuting them.

http://topics.nytimes.com/top/reference/timestopics/organizations/n/new_york_city_police_department/ticketfixing_scandal/index.html?scp=4&sq=nypd&st=cse

 

5. Summary (Pentagon Trials) from CNN

Government transparency has long been an issue of heated debate. The public says that it has the right to know what is going on in the government and the government says that national security is at stake if it completely transparent. This conundrum has long led to speculation, conspiracy theories, distrust, and scandal. In an unprecedented move, the Pentagon has vowed to become more transparent in its handling of trials. It is going to allow video of courtroom proceedings to the media and affected people of the trials. The catch is that the video will not be released until it is scrubbed of all content that may lead to a national security issue. The move by the Pentagon shows that it is willing to have some transparency, but it is not yet willing to go all the way.

http://www.cnn.com/2011/09/30/us/pentagon-transparency/

 

6. Summary (Herman Cain) from the New York Times

Herman Cain, a current presidential candidate, has been accused of sexual harassment. This can be very damaging to his campaign bid for presidency if not handled transparently. The problem so far is that he has failed to be transparent. “Mr. Cain’s shifting explanations and the gaps in the story made it hard to determine the impact of the revelations on his long-term prospects…” Shifting stories and not giving a clear recount of what has occurred leaves room for speculation that is hurting his campaign. If Mr. Cain were to simply tell the public exactly what occurred while he worked for the Restaurant Association, there would be no room for speculation and people would be able to make an informed judgment about his actions. Alas, this is another case of lack of transparency creating problems.

http://www.nytimes.com/2011/11/01/us/politics/cain-confronts-claim-from-90s-of-harassment.html?_r=1&scp=26&sq=herman%20cain&st=cse

 

7. Summary (Euro Banks) from the New York Times

This is a case of a lack of transparency creating fear among European investors. The government is floating many “zombie” banks that are not stable, and the money being invested in them is not secured. This is causing fears because investors do not know whether their bond money will be soluble when their bonds close. The fear is because the government is not telling the investors how they are going to repay them if these banks do not make it into the black and collapse. This, along with the current instability of the euro, has created a tense situation that could be remedied with the use of governmental transparency.

http://www.nytimes.com/2011/11/15/business/global/lack-of-transparency-leads-to-anxiety-among-banks.html?scp=4&sq=transparency&st=cse

 

8. Summary (Pittsburg Police) from the Mercury News

In this case, there is an issue of transparency becoming law. Legislators in Pittsburg are trying to pass a law that requires a certain amount of transparency from the police department. Police departments have long come under scrutiny due to practices that are not always clear and because of complaints filed against them. Historically these complaints have been handled through internal investigations and then forgotten by the public eye. This legislation aims to make the handling of these cases more transparent and to also make the policies of the department publicly known. How much does the public have the right to know about their public servants? The legislators argue that the public deserves to know all, and the police argue that it is too costly and time consuming to keep the public completely informed of their actions.

http://www.mercurynews.com/ci_19095078?IADID=Search-www.mercurynews.com-www.mercurynews.com

 

9. Summary (New York City) from the New York Times

This is a case of on-again-off-again transparency. Mayor Bloomberg touts that fact that he tries to keep a transparent city government, yet FOIA request frequently go unresolved until after someone sues. The situation here is that the Bloomberg administration is quick to release any information that shines a good light on the city but is not so apt to release information that could be considered damning to him or the city. The repercussions of this policy are that people are questioning the integrity of their elected mayor and whether he truly does believe in freedom of information.

http://www.nytimes.com/2011/11/14/opinion/they-like-transparency-until-they-dont.html?scp=3&sq=transparency&st=cse

 

10. Summary (Mitt Romney) from ABC News

Mitt Romney is using the promise of transparency as a campaign tactic. This shows how much transparency is valued by the American public. If it were not this would not be a credible tactic in a campaign. It is though, and it shows that the voting public in America really cares, not just about what goes on behind closed doors, but also about the openness of its presidential candidates. Promising transparency is viewed as promising honesty and integrity. It is assumed that a person who claims they will not hide anything has nothing to hide. This is a great example of the power of transparency within the American system; even its promise holds weight.

http://abcnews.go.com/blogs/politics/2011/11/vowing-white-house-transparency-romney-keeps-campaign-strategy-under-wraps/

 

11. Summary (Jefferies Group) from the New York Times

“I’m sure the letter was too long and too emotional.”

That’s what Richard B. Handler, the chief executive of the Jefferies Group, told me late Monday after he sent a six-page letter to his shareholders defending the company from what he said were “half-truths, false rumors and lies being disseminated with malice by a group whose interests are absolutely opposed to yours and ours.”

This is an interesting case that points out the danger of being too transparent. In this case the CEO released a letter to his stakeholders that addressed all of the rumors that have been flying around about his company. This sounds like a good thing, but it may have its own repercussions. According to Mr. Handler “It just became apparent that the more we did to be open and transparent, the more falsehoods were spread and we needed a venue to get the whole truth out.” This is an interesting observation; he says that the more transparent that they tried to be, the more people started rumors. This brings up a few interesting question; do people always want to create rumors in business? Is there a way to please everyone? Does transparency really stop speculation or does it just change its focus?

http://dealbook.nytimes.com/2011/11/21/trusting-transparency-will-work/?scp=2&sq=transparency&st=cse

 

12. Summary (Super Committee) from the Huffington Post

For three months the United States taxpayers paid the salaries of a super committee to reach an agreement on the national budget. That is not a bad investment, except for the fact that no deal was reached and the public has not even been informed of what the super committee did for the last three months. Did they sit around and smoke cigars or play golf? Did they even try to solve the budget issues? Did they take their job seriously? These are all question that we the taxpayers have the right to know. We do not know though, because the super committee was held behind closed doors. Our dollars went in and nothing useful came out. Did we not “pay” for transparency?

http://www.huffingtonpost.com/jerry-kremer/super-committee-aint-so-super_b_1110576.html

 

13. Summary (Herman Cain Update) from the New York Times.

“Herman Cain acknowledged the slip in his own presidential fortunes but blamed it on ‘false accusations’ and news media ‘confusion.’” Nearly a month after the original fiasco, Herman Cain has yet to learn the value of transparency. His presidential bid is slipping fast away, yet he still will not directly address the issues that have been haunting him in the public eye. Mr. Cain is using a blame shift strategy that is not working nor has it worked for him in the past month. This goes to show that being transparent with the public is very important if you do not want the media to speculate and the public to go along. He has yet to show an understanding of this phenomenon; will he before it is over for him?

http://thecaucus.blogs.nytimes.com/2011/11/27/cain-acknowledges-shift-in-his-fortunes/?scp=2&sq=herman%20cain&st=cse

 

14. Summary (Facebook) from the New York Times

Facebook has just received an order from the F.T.C. that “requires the company to respect the privacy wishes of its users…” The scary part is that you would have hoped that they were doing that all along. Alas, they have not been. They have been accused of allowing third party advertisers to gain access to Facebook users’ personal data. With a half-billion people entrusting their information to Facebook, the company should not be abusing that trust. Few laws currently address the issue of internet privacy and therefore, Facebook can get away with almost anything until a government organization, such as the F.T.C., steps in and levees mandates and fines against them. In response, Mr. Zuckerberg stated that “Facebook has always been committed to being transparent about the information you have stored with us…” I guess that is a true statement, they are so transparent that they let everyone see your information.

http://www.nytimes.com/2011/11/30/technology/facebook-agrees-to-ftc-settlement-on-privacy.html

 

15. Summary (Facebook Update) From Mark Zuckerberg’s blog

Mr. Zuckerberg opens his blog with the statement “I founded Facebook on the idea that people want to share and connect with people in their lives, but to do this everyone needs complete control over who they share with at all times.” That sounds great Zuck; did you turn over a new leaf? Facebook has a sordid history of infringements on users’ privacy. To claim that everyone needs complete control sounds great, but until you follow that principle it is just a lovely sound-bite. He further goes on to insult peoples’ intelligence by saying “overall, I think we have a good history of providing transparency and control over who can see your information.” Is he referring to Facebook? I doubt it; if he were, there would have never been a need for the F.T.C. to get involved. Facebook privacy is a wonderful example of the dangers of a lack of transparency from a company. In this case it is about privacy policies, but the concept holds true over all aspects of business.

http://blog.facebook.com/blog.php?post=10150378701937131

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