A message from Thibault Dewavrin, CEO of Labrador and Broc Romanek, Chair of the Transparency Scientific Committee
Chief Executive Officer, Labrador
Cleaning the Glass Allows the Light In
Walking by a grand old home, my eyes were attracted by a grimy window through which I could see dim light and hidden shadows. Half-excited, half-scared… a sense of curiosity drove me closer and closer to this mysterious house which may contain — who knows — the magical wardrobe of C.S. Lewis’ Chronicles of Narnia?
This fantastic chain of thought triggered by a simple dirty window which distorted reality.
As corporate leaders, we have limited control on our environment and its complexity as we navigate our companies along the best path. However, we can control how much light we allow through the window when we communicate to our stakeholders around our actions, our decisions, our team, our strategy and our performance. We decide the level of transparency that can best get our story across. And we can, as some leading companies do, decide to turn a compliance constraint into a communication opportunity.
At Labrador, transparency is our mission, which we make real by distilling investor and stakeholder expectations into practical best practices for corporate disclosure. Every year, we promote these open-source criteria at our Annual Transparency Awards.
This year, we are excited to add a Transparency Award for ESG reporting, because Environmental, Social, and Governance disclosures are becoming more structured and data-driven. We are also proud to welcome Broc Romanek as our independent Transparency Champion. A passionate advocate for transparency, Broc nourishes and maintains a public dialogue around the concept of transparency through the RealTransparentDisclosure.com blog, including provide good examples of disclosure that we all might learn from.
Most importantly of all, as we approach our fourteenth year in the U.S., we would like to thank Americas’ companies, and those who demonstrate their belief in business by investing in U.S. companies. The trust generated by the virtuous cycle between investors and companies is based on transparency and its benefits to all stakeholders.
The Business Case for Transparency.
The business case for transparency is actually quite simple. It’s about trust.
It seems like a no-brainer that you would want to build trust with your shareholders. Your employees, customers and suppliers. Your communities. All your stakeholders. You gain their confidence that you know what you’re doing. Your reputation grows. You earn the benefit of the doubt.
It’s long been said that trust and relationships – much more than money – are the currency of business. Reputation matters. There are all sorts of studies out there about why your company should invest in trust building (one day, I’ll run a blog with a laundry list of the studies on RealTransparentDisclosure.com). Research shows that business partners who trust one another spend less time protecting themselves and more time working on things that will make their businesses successful. And on and on.
So how does transparency build trust?
By definition, disclosure is a trust exercise. What a company decides to disclose either instills trust – or not, if not done properly. And it’s not just trust from shareholders that disclosure can garner. It’s trust from employees, prospective employees, customers and potential customers, suppliers. Regulators. Partners. Prospective acquirors and targets.
And yes, even your own board of directors and senior managers. As the primary draftsperson, if you’re not drafting disclosure in a way that reflects how they see the company’s business, operations and culture, they’re going to lose their trust in you. Yes, you’ve got a personal stake in this. They want to trust what you’re drafting. You need to honor that desire and draft disclosure that accurately reflects reality.
We are so honored to reward those that have made a commitment to transparency in disclosure and for their achievement in winning a 2023 Transparency Award. They should be as proud as we are in them as they lead the charge in building value for their employers, which in turn builds value for all the other stakeholders that depend on companies to be the lifeblood of communities.
Transparency Champion, RealTransparentDisclosure.com