Let’s consider two otherwise identical firms.
Rocket Corp. issues their quarterly earnings press results, focusing on their financial results. Then they conduct their quarterly conference call with investors, reporting their revenue, margins, profitability, cash levels, and citing their revenue and earnings guidance for the next quarter and year. They take questions from those investors on the call and then put the directives out to the management team that: “This is what we have to do to make the numbers for the quarter, otherwise our stock will be hammered.”
Endurance Inc. also issues a quarterly press release and conducts an investor conference call, but in addition to the same financial data that Rocket Corp. issued (excluding earnings guidance), they report many additional metrics:
- Customers: Revenue and market share details by business segment, customer satisfaction levels, quality of product and service details, and more.
- Employees: Employee satisfaction levels, retention and turnover rates, training and development hours completed, and more.
- Community: Levels of environmental data, volunteer hours, charitable contributions, and more.
Rocket Corp. is afraid to report this level of detail because they don’t want to give away their “secrets.” Endurance Inc. knows that in this age of social media and instant access such information is “out there” anyway.
Which firm do you trust more? From which firm are you more likely to buy products? Their stock? Or be employed by?
Transparency builds trust.
Bob Vanourek is the former CEO of five firms from a start-up to a billion dollar NY stock exchange turnaround. He is the co-author of the award-winning book Triple Crown Leadership: Building Excellent, Ethical, and Enduring Organizations. He is one of Trust Across America’s Top 100 Thought Leaders in Trustworthy Business Behavior.
This article is one of several Bob Vanourek wrote for Trust Inc., A Guide for Boards and C-Suites, published by Next Decade, Inc. 2014 and edited by Barbara Brooks Kimmel, Executive Director, Trust Across America – Trust Around the World.