In human and organization relationships, transparency is a practical positive, given positive lip service, but seldom implemented, particularly in nonprofit management. “Privacy,” which has little practical value, is lauded by politicians and enforced by long privacy policies that no one reads. Privacy is practiced by organizations that state they are transparent.
A few years ago, a national trade association, in response to complaints from one director, studied, debated, and wrote a “transparency policy.”
Director Hector Wiseeyes said, “This is wrong. We do not need a transparency policy; we need a privacy policy. We need to declare those matters appropriately private, such as about personnel. Anything not listed in the privacy policy should be public, transparent, widely distributed.”
Ignoring director Wiseeyes, the board wrote a transparency policy, and the organization began to publish meeting agendas, minutes of past meetings, appointment/election of officers and directors, balance sheets, income statements, budgets and important news. However, to this day, it does not announce availability of those documents. No one knows when/where they are published. So, no transparency.
The point of transparency is manifestly practical. Transparency encourages idea exchanges, opportunities for both insiders and outsiders to comment, to suggest, to improve, to make a difference.
A few years ago, a large Indianapolis nonprofit sold significant works of art. The sale itself was known, but the proceeds were not announced. Directors, apparently, were told not to disclose the amount of money received. The reason? “Donors might give less.” Of course they might give less! Donors have every right to give less, based on knowledge.
Recently, another Indianapolis nonprofit retained a professional consultant to comment on strategy and decisions. The board received an oral presentation with slides. The slides were made available to outsiders, on request, but the slides were generalizations, void of content, with power point platitudes. The written report was longer, more detailed, requiring two hours of discussion among the executive committee and CEO. Neither the slides nor the report was advertised to stakeholders, the people who founded the organization and who volunteered, donated and served in leadership positions over the years. Insiders, just a few, got the report, but, alas, no one else. No transparency.
Information exchange, transparency, has immense value. Publicly exchanging information about COVID-19 leads to faster discovery of treatments and immunization. If an organization has sufficient funds from sale of an asset, donors may direct their funds elsewhere to organizations with weaker financial foundations. A performance art organization might learn about new techniques, new venues, new technology, new sources of funds, just by distributing its consultant’s report and welcoming comment from outsiders.
The following correlation is a stretch, but it makes the point. During construction of the Brooklyn Bridge, workers became ill and died from the bends (decompression sickness) because American physicians removed patients from the perceived offending environment, the area of high pressure. Instead, patients should have remained there, and decompressed more slowly. Sadly, contemporary physicians in France understood, but communication was not available. Lives could have been saved here, if they had only known.
Technology now favors information exchange, but human nature does not. Insiders know. Outsiders must remain outside. Outsiders are to be feared.
John Guy is an investment adviser and author of “Middle Man, A Broker’s Tale.”
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September 12, 2020 at 01:14PM
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