LEARN TO LEAD - Civil Air Patrol

13.4 The New Look of TransparencyBy Kristin ClarkeOBJECTIVES:15. Define the term “transparent” as it refers to organizations.16. Name the finance report that nonprofit agencies (including CAP) are required to publish annually.17. Identify benefits of having transparent communication within an organization.18. List steps that an organization can take to become more transparent.A board member calls for a meeting to move into executivesession. Under what circumstances do you, as CEO,voice opposition?The membership department receives several inquiriesabout the percentage gap between your CEO's compensationand that of your lowest-paid employee. Do you sharethat information?A potential donor asks your organization to provide acopy of its whistleblower policy. Do you have one?These examples are real. Members, donors, media, regulators,the public, and volunteers are just some of the stakeholderswhose demand for greater transparency and itsclose cousin, accountability, has grown in the past decade.Finances, of course, top the list for scrutiny, followedclosely by governance and communication. The corporateworld has been coping with a new era of regulated transparencyand accountability ever since passage of the Sarbanes-OxleyAct (SOX) in 2002. Some nonprofits andassociations, concerned that the law would expand totheir sector as well, directed their auditors, investmentcommittees, and boards to voluntarily adopt similar governanceand accounting principles.According to SOX coauthor and former senator MikeOxley, airing the inner workings of nonprofits was neverpart of any discussions by lawmakers. He applauds suchinitiative, though, and urges other associations to followsuit. Speaking at the 2010 Council for Non-Profit AccountabilitySummit, Oxley stated that such activities"will improve the fiscal condition of nonprofits andstrengthen donor confidence."And Congress may yet change its mind about the scope ofSOX. In a later interview, Oxley warned, "A bit of cautionon the part of the nonprofits and some planning hopefullywill mean that down the road they won't have to face thiskind of problem, because once you have that breach ofreputation risk, boy, it can go downhill very, very fast."Says Ron Noden, chair of the Council for Non-Profit Accountability,"[Transparency] is an issue that will continueto get attention in the nation's capital and in statehouses around the country. We need to be proactive, sononprofits can continue to be mission focused."WHAT DOES TRANSPARENCY LOOK LIKE?A major hurdle, though, is the cloudy definition of a"transparent organization." Warren Bennis, founder ofThe Leadership Institute at the University of SouthernCalifornia, wrote an entire book on the subject, Transparency:How Leaders Create a Culture of Candor, andstill acknowledges that the term "has many differentmeanings" and has evolved in the past 10 years."One of those meanings is the transparency of transactions... [N]ot having enough of that led to the recent [financial]crash," Bennis says, adding, "The word'transparency' in the business lexicon and in the vernacularI'm familiar with has everything to do with how open,how visible, organizations are in dealing with variousstakeholders and also within the organization—howtransparent our people are with each other, how candidthey are."Bennis and his coauthors emphasize that the burden andopportunities around greater transparency are here tostay because of the multiple information outlets nowavailable to consumers, especially online."We can find out who the best practitioners are in almostany particular branch of medicine or profession [just byvisiting a few websites], so to the extent that people areeducated and can distinguish new sources, it's going to bevery hard to keep things secret unless there is some kindof federal provision or patent law that would [do so]," hesays.Bennis recalls a 2005 speech he gave at Harvard Universitycalled "Transparency Is Inevitable." At the time, heestimates, only 20 percent of the audience had ever heardof the word "blogosphere." Now, thousands of blogs, notto mention microblogs via Twitter, are born daily.66