American Businessman, Howard Schultz, once said: “When you're building a business or joining a company, you have to be transparent; you can't have two sets of information for two sets of people.”
Transparency is becoming increasingly essential to an organisation’s healthy reputation and continual operation in today’s socially conscious world. Active consumers and society demand that businesses play open cards with regards to financial health and shareholder value, as well as non-financial reporting and more.
“It is all good and well to be a financially strong organisation with wonderful business growth opportunities. However, without transparency in all dealings, these results do not mean much in terms of an organisation’s overall reputation,” says Regine le Roux, Managing Director of Reputation Matters. “Should stakeholders notice any discrepancies or inconsistencies in financial reporting, they will easily get suspicious and develop a sense of distrust towards the organisation,” explains le Roux.
Organisations face increasing pressure to report publicly, not just on financial performance but also on non-financial, social, environmental and ethical performance as well as on remuneration policies. In turn, this reporting is becoming increasingly more specific and measurable and therefore subject to independent scrutiny and audit. Transparent reporting is, therefore, a key reputational driver and holds endless benefits to organisations.
Transparent financial reporting helps investors and shareholders make decisions based on sound financial information. Having this information easily accessible will ensure that investors are more likely to consider investing in your organisation. “The same applies to clients, if they know that your organisation is open and honest in all its dealings, they will be more likely to trust and support your business over your competitors,” says le Roux.
“Business growth is just as important as being transparent in order to help build a strong organisational reputation,” adds le Roux. “It’s about creating shareholder value and it is believed that the only way to maximise this value and increase business growth is by ensuring client happiness and motivating employees.”
A mission-driven, value-centred organisation is able to motivate employees to create innovative products and superior client service that is sustainable over a long period of time. This, in turn, leads to increased client satisfaction and a competitive advantage that drives high revenue growth, with high-profit margins and high rates of growth in profitability. An organisation that proves to be profitable and sustainable will also prove to be commercially viable. Ultimately, this upward spiral of success attracting success contributes to a positive impact on the organisation’s overall reputation.
Le Roux shares pointers to keep in mind when it comes to building your reputation through business results:
Be transparent in all your doings, especially financial ones: disclose information, even though you may think it is insignificant.
Ethical behaviour is non-negotiable on all levels of the business: stakeholders are activists and are always scrutinising organisations for any inconsistencies or discrepancies. Manage your business in a way that it is a responsible and ethical participant in society.
Continuously build value for your shareholders: put yourself in your shareholders’ shoes and deliver the value to them that you would have wanted to receive.
Shareholder value is maximised by ensuring client happiness and motivating employees: keep your employees motivated and they will perform above what is expected and keep clients happy. If the clients are satisfied with the service and continue to support the organisation, shareholders will be pleased with the business results.
“By keeping these pointers in mind when conducting business, it will result in a win-win situation for both the organisation and its stakeholders,” concludes le Roux.
For more information on managing and investing in your reputation, visit www.reputationmatters.co.za or call +27 (0)11 317 3861. Reputation Matters is also on Facebook (www.facebook.com/yourreputationmatters) and Twitter (@ReputationIsKey).