The importance of CEO transparency

Do You Publish Your Board Book To Your Entire Company?

In this recent blog post, Brad Feld revealed his benchmark for CEO transparency: Sharing the information you give to your board (usually quarterly) with your entire company. He says, “If you can’t be open with your company about the information you report to your board, how can you actually be transparent?”

I agree with this. After each quarterly board meeting, I would share the slides and other information with all employees during an all-hands presentation or series of presentations as my companies grew. Many private company employees hold stock options at the least and deserve to know what is going on in the company. This openness engenders trust and camaraderie. It also helps to keep everyone focused on achieving the company’s goals. I would not share compensation or other sensitive details, but otherwise, the good, the bad, and the ugly of company performance need to be communicated.

This goes right to the heart of CEO credibility. I discussed how some CEOs are reticent to share negative information in my post about the drawbacks of the cheerleader CEO. These CEOs are afraid employees will worry too much or quit if they think things are not going well. I think this is misguided. As I said: “Imagine being on a football team and not knowing the score after playing four hard quarters. To most people this would be even worse than losing and would quickly lead to players not putting in much effort. It is the same in a company.”

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September 19, 2014