How to Instill More Transparency in Your Business

What is transparency in business?

Transparency in business is the practice of sharing information about results, strategic direction, operations and compensation with others outside the executive team and owners. These individuals include various stakeholders, primarily employees and customers.

Julia Yurchak, a talent sourcing, acquisition and management specialist at Keller Executive Search, emphasized that making your business more transparent isn’t complicated — it’s about consistent, honest communication.

“Share company performance with your team regularly,” Yurchak advised. “Explain the ‘why’ behind decisions. When things go wrong, talk about what happened and how you’ll fix it. The benefits are huge: deeper employee commitment, stronger customer loyalty and better decision-making across the board.”

There are different levels of transparency, and it isn’t always a good idea to share everything. For example, trade secrets should be accessible only to a select few and protected by nondisclosure agreements (NDAs). Similarly, sensitive financial information, like business bank account balances and customer payment data, should be protected and access-restricted. However, there are several areas where sharing information with stakeholders is appropriate and beneficial.

How to implement transparency in your business

Businesses can introduce several types of transparency, including the following:

• Salary transparency
• Task transparency
• Financial transparency
• Employee performance transparency
• Hiring transparency
• Transparency with customers

We’ll break down each area in more detail and share practical tips for implementing them in your business.

Salary transparency 

Salary transparency has been a hot topic of debate. People generally recognize that being open about salaries can help reduce both perceived and actual wage discrimination based on gender, race or other factors.

At the same time, even business leaders who don’t intentionally discriminate often fear internal repercussions. One of the main arguments against salary transparency is that employees who are paid less than their peers may become dissatisfied or reduce their effort. There’s some evidence to support this:

• According to 2024 Brightmine research, 33 percent of U.S. employees would seriously consider quitting if they found out a co-worker in the same role earned more. Another 51 percent said this information might prompt them to look for new opportunities. 
• Harvard Business Review research found that top performers are more likely to quit after discovering that new hires in similar roles are paid more.

Action: Instill salary transparency with an accessible salary matrix.

You may be able to mitigate the negative impact of pay discrepancies if you can justify the differences in compensation. An accessible salary matrix is one way to do this. In a salary matrix, each department’s roles are listed vertically by seniority (for example, entry-level marketer up to head of marketing). Each role is assigned a salary and projected salary increases.

These numbers are typically set using the following system:

• Salaries are determined by researching averages for equivalent roles in the region where your business operates.
• During the hiring process, candidates can negotiate their seniority level but not the salary within that level. Once the matrix is established, all employees at the same level receive equal pay.
• Outside of promotions, everyone in the company receives a raise when the team hits a predetermined collective goal.
• The full salary matrix is shared with employees via the company intranet or email.

Building an accessible salary matrix takes time and effort. You must invest in creating a fair and consistent compensation system, because once it’s published, you’ll be held to it. But that’s what should be happening anyway; cutting corners on pay will always catch up with you.

Task transparency

The silo is one of the most used metaphors in business. We hear so much about breaking down silos because, unfortunately, they’re ubiquitous. Business silos create bottlenecks, and information gets stuck at the individual, team and organizational levels — and sometimes inside software tools.

Here’s what often happens:

• People keep valuable information in their brains or inboxes instead of sharing it.
• Teams don’t communicate achievements or insights that could benefit other departments.
• Over time, organizations develop cultures where information is intentionally or accidentally hidden from employees, partners or clients.

These bad habits tend to become bigger issues as companies scale. That’s why it pays to build task transparency into your culture early on. If you do so, you can gain the following benefits: 

• New opportunities: Teams gain visibility into each other’s work, which sparks ideas and improves cross-functional collaboration. For example, a data analyst might flag a marketing test that’s worth expanding, or a customer service rep might spot a great beta tester.
• Greater accountability: Daily updates encourage reflection and planning. Updates help people stay focused, and the possibility that others will review their progress creates healthy pressure to follow through.

Action: Share information to instill task transparency.

Here are ways to implement task transparency in your business:

• Hold weekly meetings. Break down silos and improve internal communication with regular all-hands meetings where team leaders share wins, setbacks and progress on goals. This builds visibility across departments and encourages a culture of openness around both successes and challenges.
• Post information for all to see. As your team grows, company-wide meetings may become harder to manage. (Does your space even fit 50 or 100 employees?) Instead, encourage teams to share updates in a public Slack channel or to use another internal communication tool that gives everyone access to key information.

Financial transparency

Did your company hit its quarterly goals? How close is it to meeting its financial, sales or other year-end targets?

By sharing performance metrics with employees, you empower them to make faster, better decisions, often without needing senior leadership’s input. It also helps teams prioritize and stay focused.

Being close to achieving company goals can empower and encourage your staff to put in a little more effort to reach the finish line. If not, the team can brainstorm to find out where the problem is and how to fix it.

Action: Instill financial transparency company-wide and within departments.

A key way to promote financial transparency is to post and discuss the company’s progress toward financial goals. Here’s how to do it:

• Share profitability goals. General company goals, like profitability, can be shared on internal communication tools, like Slack, or reviewed with employees during quarterly or annual check-ins. Be mindful that this type of information should stay internal; if competitors gain access, it could put your business at risk. Communicate sensitive data in a way that limits copying or external sharing.
• Discuss departmental goals regularly. Department-specific metrics should be shared more frequently with the teams who are responsible for achieving the associated goals. For example, profit margin by product or salesperson should be reviewed with your marketing and sales teams monthly so strategies can be adjusted to focus on more profitable opportunities.

Employee performance transparency

Openly sharing individual employees’ progress on their goals is a controversial practice. On the positive side, visibility into others’ goals and progress can help team members prioritize and show empathy. For example, if you see that a colleague has completed only 10 percent of a complex key result with two weeks left in the quarter, you might avoid distracting them with low-priority requests or even offer help if you’re ahead on your own goals.

However, knowing that a colleague is falling behind can also lead to peer pressure, workplace conflict or shaming, especially in competitive environments.

Action: Instill employee performance transparency with informal feedback. 

To reduce the potential downsides of performance transparency, periodically collect anonymous, informal feedback about all employees, including managers and executives. Managers can then review this feedback alongside each person’s employee data and goal progress.

Understanding that no one is perfect, managers should share this input privately in one-on-one meetings, focusing on areas for growth. Employees can use the insights to improve, while managers also may ask high performers to help teammates who are falling behind.

Hiring transparency 

“Hiring” and “transparency” don’t appear in the same sentence often. When you find a candidate you want to hire, it can be tempting to hold back anything that might cause them to reconsider. If you’re unsure about their fit, you may hesitate to offer full access, and you might worry about shifting the power dynamic, especially during salary negotiations. 

However, being upfront with new hires sets the tone for a healthy work environment. Most candidates understand that no company is perfect, and preparing them for real-world challenges reduces stress and builds trust in leadership.

Action: Instill hiring transparency with a test run. 

Increase transparency in your hiring process by inviting candidates to complete a short pilot project. This allows potential hires to experience a typical workday and gives your team a chance to evaluate the candidates’ skills in action.

They can have lunch with the team, interact with employees, ask questions and get a realistic feel for the workplace. This will give you a good idea of whether the potential new hire fits the company culture.

Transparency with customers

While it’s beneficial to have all employees on the same page, it’s equally important to be transparent with your customers. Hiding information from customers is viewed as shady and can backfire, wiping out any advantage you may have had.

According to a widely cited study from Label Insight, 94 percent of shoppers prefer brands that are completely honest and transparent, and 70 percent actively research companies before making a purchase.

Recent data further highlights how transparency drives trust and affects business outcomes:

• Deloitte’s 2024 Connected Consumer Survey found that consumers who trust their tech providers spend 50 percent more than those with low trust, underscoring the financial value of transparency.
• In PwC’s 2024 Voice of the Consumer Survey, 77 percent of consumers said companies must communicate clearly to earn their trust, and 62 percent cited transparent disclosure around environmental, social and governance issues as a key factor in maintaining that trust.

Action: Instill transparency with clear customer communication. 

To build trust, be upfront with customers about your pricing, product ingredients, labor practices, sustainability efforts, and methods for handling their data. If you make a mistake, take responsibility and clearly explain how you’ll fix it and prevent it from happening again.

Why is transparency important in business? 

We’ve already mentioned some benefits of increased transparency, including higher employee morale and retention. Here are a few more:

• A larger pool of job candidates
• Greater internal workplace collaboration
• Faster project turnarounds

Miriam Groom, CEO of Mindful Career, emphasized that transparency and trust drive better outcomes, especially with employees. “When employees understand how decisions are made, or when clients see the values behind your actions, you build credibility,” Groom explained. “Transparency empowers accountability, fosters engagement, and minimizes confusion or speculation, which can quietly erode morale.”

Here are a few more reasons why transparency is vital:

• Transparency levels the playing field. One of the most powerful impacts of transparency is that it promotes fairness through equal access to information. When all employees, regardless of their role or seniority, have access to the same data, it builds trust across the organization. Teams feel more included and respected, which boosts morale and improves retention.
• Transparency encourages decisiveness. In a transparent environment, employees don’t have to chase down information to make decisions, so they move faster and more confidently. They feel empowered to take action themselves, which leads to more accurate deliverables and quicker turnarounds.
• Transparency boosts efficiency. Well-informed employees come to conversations and meetings exceptionally prepared, which reduces tiresome back-and-forth and duplicated work. As a result, teams are more collaborative and communication improves.

Ed Hones, an employment attorney at Hones Law Employment Lawyers PLLC, explained how a lack of transparency breeds mistrust and introduces legal risks. 

“When employees feel like they’re kept in the dark about pay structures, advancement opportunities or company policies, it opens the door to confusion, resentment and, in some cases, discrimination claims,” Hones cautioned. “On the flip side, businesses that lead with clarity build stronger relationships and reduce the likelihood of legal disputes.”

Downsides of business transparency

Although the effects of business transparency are generally positive, there may be some challenges. Watch out for these potential downsides:

• Transparency can lead to distorted information. One potential problem is that the information you share with employees could be misunderstood, misrepresented or taken out of context. If you have unhappy or alienated employees, they may use the information you’ve shared to attack the company internally or even share it with competitors.
• Transparency can foster blame. Complete transparency can sometimes cause poor performers to be blamed, rather than supported and coached to improve.
• Transparency takes time and effort. It takes time and effort to communicate all of the information needed for transparency, especially in the beginning.

Take these steps to counter these issues: 

• Provide context. If you’ve made a decision, don’t just inform your employees. Explain why you made the decision, how it reflects your company’s values, and how it benefits the company and its stakeholders.
• Touch base. After you share key information, check in with individual employees to ensure they understand it clearly and to get a sense of their reactions. This can help prevent misunderstandings.
• Communicate your expectations. If the information is sensitive, be explicit that it’s not to be shared outside the company, and explain how doing so could harm the business and its employees. This is a good time to remind employees about any NDAs they may have signed.

Transparency in forward-thinking businesses

Is greater transparency in business such a radical idea? Consider the following straightforward ways to implement transparency:

• Be open about salaries, and use research, not negotiations, to set them.
• Be open about work, because it creates accountability and opportunities for collaboration.
• Be open about performance, because it creates a culture of empathy, drive and pride in your work.
• Be open about hiring, because it attracts candidates and allows both parties to see if they’re a good fit before they commit to the company.

These are logical and forward-thinking steps, not radical changes. Although transparency in business may not be the norm, by following the best practices above, you can transform your company from typical to exceptional.