Transparency: the key to your reputation
Across the financial industry, an increasing demand for transparency is changing the way organizations do business. From investors to regulators, transparent financial reports are more important than ever.
Deutsche bank chief Stefan Krause recently discovered just how difficult that can be as he tried to reform his organization’s financial records, which have been the subject of intense international criticism.
Here’s what we can learn from his journey.
- Start transparent, stay transparent Making financial records transparent isn’t a switch that can be turned on and off—the level of transparency that is needed for your reports should be established from the very beginning. Though it may take some time, organizing and maintaining accurate records is vital to the health of companies in every industry.
- Don’t fake it—make it If you've made mistakes in the past, it's understandable that you may be more reluctant to openly share your records. However, this is not a path you should go down. A lack of transparency is a major red flag and can do more harm to your reputation than good.
- Do the right thing Unless you’ve been keeping immaculate records since your company's inception, achieving transparency with your financial records isn’t going to happen overnight. But taking solid steps in that direction is key to securing the future of your organization. To be successful, set realistic goals for achieving transparency. Don't wait to make changes until after problems arise.
Being more open requires a fundamental change in how you do business, but it can pay rich dividends. Dodd-Frank is proof that the trend toward transparency isn’t just a passing fad.
Regulatory demands are only going to increase. Don't delay the inevitable. Why wait to get on board?
As we've seen over the last several weeks, Krause's difficulty in disclosing information has proved to be his biggest problem. It’s better to disclose your mistakes on your own terms than wait for them to explode. In Krause's case, his critics are now calling for consequences.
When companies refrain from sharing the whole picture, the consequences can be severe. You run the risk of damaging your company's reputation and harming investor faith.
But, it’s never too late to start doing the right thing. For more information about how to be compliant without slowing your company's growth, follow these steps.