Following our first blog post in which we drew on the Marks & Spencer (M&S) Stakeholder Transparency Study findings to define what transparency really is, we are now delving deeper into the stakeholder findings to assess how transparent large companies are perceived to be today.
There is a strong business case for corporate transparency. Benefits of transparency clearly outweigh the risks. When asked to list them, online survey respondents cited nearly one-third more benefits than risks. In today’s wired world, failing to be transparent is considered to be riskier than being transparent.
Yet, large companies’ performance is lagging expectations. More than half of online survey respondents (54%) believe companies are not transparent today. More preoccupying even is that little improvement has been made over the past five years; close to eight in ten online survey respondents (77%) say that companies’ transparency performance has stayed the same during that time period, while a little less than two in ten (19%) say companies’ transparency performance has improved.
Three core factors currently prevent companies from improving their transparency performance:
1. Companies are perceived to make limited (selective) disclosure across their areas of business risks. Stakeholders would like to see more information from companies on how they assess and address their most material risks.
2. Supply chain transparency is viewed to be insufficient, be it at the sourcing or manufacturing level. Stakeholders would like to see more on the social and environmental impacts of supply chains.
3. An internal mind-set incompatible with transparency is perceived to be persisting in companies. Management teams are viewed to be lacking in openness when it comes to explaining how they make their business decisions on a day-to-day basis.
Despite a strong business case, and pockets of best practice, there is room for corporate transparency to improve. In our next post, we will explore how M&S is leveraging the Stakeholder Transparency Study to better understand stakeholder expectations and prioritise its transparency efforts.
The M&S Stakeholder Transparency Study was conducted using a dual-methodology: n=14 in-depth interviews were carried out with a selected group of experts to obtain qualitative views on transparency trends and implications (from January 12th to February 13th, 2015) and n=172 stakeholders including academics, NGOs/think tanks, media, consultants, corporates, SRI analysts and financial institutions took part in an online survey (from January 12th to 2nd February, 2015), thus providing hard quantitative data. Experts and stakeholders invited to take part in this study were jointly identified by GlobeScan and M&S.