Transparency a Paradoxical Proxy for Trust

While both regulators and academics insist that business risk is reduced when corporations comply with corporate governance guidelines on transparency through greater disclosure and reporting, we have contended that although this is outwardly desirable it can hinder both the building of trust and corporate responsibility. As a norm, transparency can simply become a box-ticking exercise, where corporations tactically are more willing to share what stakeholders want to hear while concealing or avoiding more complicated issues. Transparency thus can encourage strategic ploys which are not guided by moral rectitude but are more concerned with perpetuating the corporate image and reputation than being trustworthy. The chapter considers the conceptual relationship between trust and transparency. With regard to corporate governance and moral behaviour these concepts are also considered as components of a legal construct and from a philosophical, moral perspective. Rather than building trust and alleviating public mistrust, transparency paradoxically may lead to public, social and market distrust.