“Sunlight is said to be the best of disinfectants.” So wrote United States Supreme Court Justice Louis Brandeis, in his 1914 book critical of the concentration of power in banks and financial institutions, Other People’s Money and How the Bankers Use It.

Over a century later, sunlight is experiencing a resurgence in popularity as a disinfectant through the concept of radical transparency. This movement towards greater transparency is increasingly being adopted by a wide range of businesses from the technology, legal and environmental sectors as well as the banking and finance sector that motivated Brandeis’ book. 

The movement has received a surge of attention in recent years due to policies promoted by pioneers like Ray Dalio, the founder of asset management firm Bridgewater Associates. Dalio sought to improve decision making by encouraging all employees to express their opinions freely about all aspects of the business, creating what he calls an “idea meritocracy”, where the best ideas rise to the surface.  

Other pioneers include the US media streaming company, Netflix, and Finnish software consultancy, Reaktor, both of which have implemented wide ranging radical transparency policies covering everything from wage transparency to radical candour in internal communications to releasing employee emails to the public. 

And the idea is growing in its appeal. The 2018 Future of Work Study, commissioned by online communications platform Slack, found that “80% of workers want to know more about how decisions are made in their organization and 87% want their future company to be transparent”. 

However, there’s no single definition or implementation of radical transparency and it is employed in different ways in different contexts, and each has its own ethical implications. 

The virtue of openness

In its broadest sense, transparency simply means openness, especially when it comes to revealing and sharing information. What makes it “radical” is when information that was previously closely guarded is systematically opened up to a wider audience, whether that’s within the organisation or without.  

The primary ethical virtues of radical transparency are that it improves accountability and prevents corruption, in the sense of the improper use of power.

A culture of radical transparency not only makes it harder to conceal wrongdoing or compromising information, it also encourages a greater sense of honesty in dealings with others because of the anticipation that all information about those dealings will be revealed.  

Radical transparency can also help counteract some of the power dynamics that influence decision making within organisations, whereby individuals might be reluctant to challenge the ideas and opinions of their leaders. A culture of radical transparency can improve decision making, as is claimed by Bridgewater, but also encourage people to speak up if they see something they believe is inappropriate. 

Another form is wage transparency, which can promote fairness by giving employees more bargaining power in negotiations, placing them on a more even informational playing field with the employers. This is especially beneficial for those who are less inclined towards aggressive negotiation and can help counteract biases based on gender, racialisation and disability. 

In an environment where trust in institutions, government and business is increasingly strained, radical transparency directed towards the public can serve to rebuild some of that trust. More organisations are laying bare information such as their employee diversity data, the results of internal or independent reviews – such as conducted by The Ethics Centre on behalf of the Australian Olympic Committee in 2017 – or details of their supply chains and environmental record.  

Virtues and vices

Openness is a virtue. However, as Aristotle pointed out, any virtue taken to extreme can become a vice, and pushing transparency into “radical” territory steers it towards several ethical pitfalls and trade-offs that can easily be overlooked. 

For a start, transparency sits in natural tension with privacy. Privacy is not just about restricting access to information but it can be thought of as the right of each individual to exercise some control over their personal information. This means they should have some power to choose whether or not to reveal their personal information. Some examples of radical transparency, such as wage transparency or the sharing of internal emails, can violate that right to privacy. 

Privacy also enables us to protect ourselves from those who might use our personal information in bad faith to exclude, discriminate or persecute us. Radical transparency risks bleeding over into the personal space, such as if health, sexuality or religious attitudes are revealed that have no bearing on someone’s professional performance but which could expose them to unjust persecution. 

One of the goals of radical transparency is to promote trust, but ironically it can also work to undermine it.

There are many kinds of special trusted relationships that are dependent on privacy, such as the relationship between patient and doctor or priest and parishioner. Should these conversations be made open, many people would end up concealing information for fear that it would be made public.  

While no-one is suggesting radical transparency in the doctor’s surgery quite yet, it underscores that transparency in inappropriate contexts can actually cause people to suppress information rather than share it. There is already evidence that some workers in radically transparent workplaces change their behaviour to conceal information from their peers and act in a performative way that will be seen in a favourable light by others even if it’s not productive. 

Trust in others is something that is learnt and must be cultivated through experience and practice. Should radical transparency seek to make trust redundant by making all information public, there is a risk that the virtue of trust will atrophy. This represents a real ethical risk should those individuals return to a less transparent environment where the virtue of trust is required once again. 

Respectfully disagree

Radical transparency also requires an organisation to establish appropriate norms and culture in order to execute it in a safe and non-toxic way. In many instances, we modulate how we speak, how honest we are and what information we share on the basis of the relationships we have and the respect we owe to the other parties. In many contexts, deference, sensitivity or an ethic of care – or just the norms of good manners – trump candour, such as when we are speaking to a senior or vulnerable individual.  

If we have implicit norms that promote deference to senior management, for example, or that encourage us to be sensitive towards a colleague who has just lost their job, these can come into conflict with the norms of radical transparency. There are accounts of employees feeling tremendous awkwardness when they’re thrust into radically transparent meetings where they’re expected to criticise managers or give reasons why a colleague should be fired.  

It can take considerable time and effort to change the norms of discourse within the workplace to enable something like Dalio’s “meritocracy of ideas” in a way that is not overly confronting, where people feel like disagreement is tantamount to a personal attack.

These norms require that people feel respected, secure and safe to speak, which can also be threatened if radical transparency is executed poorly. 

If implemented in a targeted and systemic way, radical transparency can deliver considerable ethical benefits in terms of elevating trust, improving decision making and encouraging constructive disagreement. But the most radical and hasty implementations carry serious ethical risks. Arguably, the point of the radical transparency movement is not to continually drive towards ever greater levels of transparency in every domain but to make openness an ethical norm that is, itself, no longer radical. 

Michelle Bloom, Director of Consulting and Leadership at The Ethics Centre, discusses the results of Shadow Values Reviews she has conducted for Australian organisations, which reveal and unlock the hidden values that really guide an organisation’s culture.

Shadow Values and principles are an expression of the unstated operating culture of an organisation. Operating beneath the surface, they lie beneath the expressed values and associated behaviours of an organisation. Many organisations, for example state “collaboration” as one of their values which is an effective and positive way to ensure you get the best thinking and diverse perspectives. However, what The Ethics Centre’s Consulting and Leadership team have found is, the value of collaboration is operationalised as “co-operation”, leading to less diversity of thinking and curiosity to explore perspectives. Shadow Values can be even an organisation’s culture as they remain unspoken and out of awareness.

We spoke with Michelle Bloom of the Ethics Centre’s Consulting and Leadership team about the results of Shadow Values Assessments she has done for Australian organisations.

How does a Shadow Values Assessment differ from a traditional staff engagement or culture review?

Most large and medium sized organisations do engagement and culture reviews. Having completed many, with different organisations, we’ve found they’re useful up to a point, usually determined by people’s feeling of psychological safety – the point to which they feel safe to express their actual experience.

We’ve all experienced going through the motions with surveys and being less than forthcoming with our opinions when being asked for feedback, whether that’s because of apathy, fear of reprisal or any number of reasons.

What we’ve done is developed a range of methodologies and approaches to get below the surface of how people feel when they talk about work and build a climate of safety for employees to express their opinions freely without fear of retribution.

This is important because once the skeletons are out of the cupboard, the Shadow Values are all known – they’re understood, people feel a sense of relief and optimism that things can change and change for the better. It’s a different paradigm – this approach is more social science and anthropological, more qualitative than other, more standard culture pulses and staff surveys. It’s more about listening to how people express their experiences, which means they’re inherently more comfortable in having a conversation that’s focused on what matters to them and about how the organisation lives their values and where they don’t.

The approach explores people’s lived experience of the values, and the language people use to describe their perceptions gives you a different depth that you don’t find in other culture reviews. Our culture review provides rich insights into the shadow aspects of the culture which is particularly important is times of rapid change and uncertainty. It is not using benchmarks, often validated in a BAU environment, which give a partial view and less relevant in a VUCA context.

What sort of Shadow Values are exposed by these assessments?

We often find similarities in the Shadow Values raised across different organisations, for instance employees recounting their ability to raise issues, manage up, or quoting expressions such as, “keep your head down” and “don’t rock the boat”. These are very common manifestations of maintaining harmony, avoiding conflict, and just getting your job done.

Our insights provide an understanding of how the different Shadow Values constellate to form patterns of behaviour that support the implementation of strategy (or not). This allows you to see a systemic view of the organisational culture: how to shift, amplify and or re-enforce behaviours in service of living your values, implementing your strategy, and achieving your purpose as an organisation.

People join, stay, perform, or leave organisations based on their experience of the culture and what the organisation says it stands for. If there is a disconnect between the espoused values and purpose and the employees experience of them, it can lead to disengagement, resentment, poor performance and a cynicism impacting both the employee and customer experience.

These systemic insights are a bespoke part of the assessment and what we recommend to one organisation wouldn’t necessarily be the same as what we’d recommend to another. It’s about understanding the social system within the organisation, and each organisation will be quite different based on their shadow values.

How have you seen Shadow Values Assessments make an impact upon clients’ organisations?

Our clients have told us that Shadow Values Reviews have helped them to understand the drivers of behaviour and performance and guided them to intervene at a systemic level to shift these patterns and ways of working. The reviews also help them to understand the shadow values that are not formally codified but are having a very positive impact such as “entrepreneurialism” in one organisation.

Engagement surveys, 360 reviews and culture pulses deliver a very different set of quantitative data to the qualitative information about culture that comes from a Shadow Values Review. A recent client undertook both a traditional staff engagement and a Shadow Values survey to get insight into how to deliver on their strategy.

Another recent client had issues of psychological safety and allegations of harassment despite having policies and procedures in place to protect employees. As we have seen, all too much recently, that what is in the policy may not reflect how people actually behave. When organisations fail to address these Shadow Values, it can be a slippery slope, leading to unthinking practice, ethical failure, and moral injury. When we ignore, and unintentionally collude through fear, by not calling out and reporting behaviour we know are unacceptable.

What we were able to do was create safety for people to be able to discuss these very sensitive issues and share their experiences confidentially, and report back on themes and patterns of behaviour. People put a lot of trust in us and we have the credibility as we are  independent and not for profit, which is a key differentiator of The Ethics Centre from other consulting firms.

We made a number of recommendations that the organisation implemented, and as a result the executive feels strongly that they’re able to deal with the issues sensitively and ethically, manage the systemic risk, implement structural changes and build capability to align their ways of working with their purpose, values and principles.

Have you uncovered and rectified any other examples of detrimental Shadow Values?

In another organisation, we identified significant Shadow Values that created internal systems of patronage, where positional power and influence led to unofficial relationships of quid pro quo. It incentivised fostering relationships with people who had positional power, leading to toxic politics and nepotism. It was inherently destabilising, undermining trust and ran contrary to the more formal systems of reward/recognition programs, performance management and remuneration.

As part of our Shadow Values culture review, we make a number of recommendations to support the organisation to transform their culture aligned to their values. Recently we did a follow-up review with an organisation who had implemented all of our recommendations and the feedback was that employees described it as a “new organisation” and a massive shift in their perceptions and experience of the culture. The performance of the organisation also reflects this shift having delivered on its strategy despite the challenging operating environment over the last 2 years and the quality of the relationships with its stakeholders has been key to delivering on this.

The quantitative measures had improved out of the park – some had improved by 300%. The reasons for that were multiple, but they included a focus on ethical leadership recognising and shifting the Shadow Values, and making formal changes to the organisation’s structure and reporting lines.”

What is the end purpose of a Shadow Values Review, as opposed to traditional engagement and culture surveys?

With a Shadow Values Assessment we’re really measuring an organisation against their espoused values – what they say they stand for and what they actually do. In the time of stress and greater complexity that we now find ourselves, recognising shadow values is becoming even more essential to managing, governing and leveraging culture, for greater employee wellbeing and performance.

If an organisation needs to become more agile or customer-centric, understanding its Shadow Values ensures that it really understands how it actually works and will be able to make informed, evidence-based decisions on what they want to do about their culture to change it. Just saying we value something is not enough. Understanding how to be more “agile or customer centric” is key. Simple, traditional approaches and solutions often fail to deliver as they don’t consider the complex social system of the organisation and the eco system in which it operates, that really determines what is valued and what is rewarded, despite what is espoused.

Some riskier elements of organisational culture have emerged recently, in the way values and behaviours are operationalised, often unintentionally but with disastrous impacts on customers, employees and organisational reputation – think Royal Commissions and recent corporate failures. What a Shadow Values Review delivers is a deep insight into your organisational culture, the values and behaviours that drive it, and a roadmap to help navigate in these complex and rapidly changing times.

The Ethics Centre is a thought leader in assessing organisational cultural health and building leadership capability to make good ethical decisions. To arrange a confidential conversation contact the team at consulting@ethics.org.au. Or visit our consulting page to learn more.

You’re at your desk when a complaint comes in about a comment by a senior employee on their social media account.

The post had nothing to do with their job, yet the complainant was able to track the person down at work – helped by the fact the same photo appeared on both the employee’s personal account and your company’s website.  

What should you do? How do you reconcile the employee’s right to express their personal views with the need to protect your organisation’s good name?  

At a recent gathering of The Ethics Alliance, members agreed that such dilemmas are increasingly common.  

It’s a complex and rapidly shifting environment. Organisations are or are expected to be driven by purpose, one which considers society as a whole in its pursuit of success and can lose community trust if they fail to satisfy their multiple stakeholders. In parallel employers encourage diversity and inclusion, while asking staff to be authentic and “bring your whole self to work”. Tensions will inevitably arise. 

In today’s organisations, people need to do more than just comply with rules – they are often required to make judgment calls. This became more formalised in the early 2000s when codes of conduct started being replaced by codes of ethics. 

This stems partly because of the rapid rate of change in business: products and services can be replicated so quickly that companies are known not so much for what they make, but for what they “mean” and how they behave.

So what happens when differing values between individual and organisational values play out through social media?  

One key insight shared at the Ethics Alliance gathering is that both risk and responsibility are greater for people who are more senior in the hierarchy. There was a consensus that clear policies are crucial, but that there is no one-size-fits-all solution, incidents need to be seen through multiple lenses and considered on a case-by-case basis.  

For example, an organisation has an obligation to protect staff who speak out on its behalf from trolling, and to recognise that just as corporate values evolve, so too do the personal values of individuals. And if a complaint is judged to be trivial or mischievous, a representative might offer an apology on behalf of the organisation but not even inform the person targeted, because that would be neither necessary nor helpful. In such a grey area, flexibility is vital. 

Law firm Gilbert + Tobin’s social media policy prohibits posts that are illegal, are derogatory of G+T, its employees or clients, or constitute serious misconduct such as disclosure of confidential information. As well, staff must not publish or post material that may reasonably be considered offensive, obscene, defamatory, threatening, harassing, bullying, discriminatory, hateful, racist, sexist or homophobic. 

The policy has flexibility built in. Anna Sparkes, Chief People Officer says that if a post could be associated with Gilbert + Tobin, the poster must add a disclaimer stating that their views do not represent those of the firm. And if a complaint were received, the outcome would depend on the actions, whether the individual could be identified as being an employee, and whether there was a direct breach of the social media policy. 

For property investment fund Charter Hall, if a senior executive has views that do not accord with major tenants or investors, there is the potential to affect the business. This is true of many organisations. 

Charter Hall’s Head of People Emma Stewart says: “If I sign a contract that says, I’m signing up for this, knowing that I’m agreeing to not bring the brand and reputation of the organization into disrepute, then unfortunately or fortunately I’ve got to accept that that may come with some compromises, and I’ve got to be okay with that if I’m prepared to continue the employment arrangement.”  

Organisations also need to be aware that if the compromise is too great within the workplace, the employee may be at risk of “moral injury”. Psychiatrist Jonathan Shay, the foundational voice on the subject, describes it as “the soul wound inflicted by doing something that violates one’s own ethics, ideals, or attachments”. 

In such a case, both the organisation and the individual may need to decide whether the relationship is tenable. For the employee, prolonged pressure to act in ways that feel inauthentic and not aligned with personal values may also affect their ability to perform well in other aspects of their job. For both psychological safety and practical reasons, it may be better to part ways. 

Tim Costello, the Director of Ethical Voice and former CEO of World Vision Australia, shares these concerns about “the interdependence and the extraordinary shared vulnerability  between a corporate reputation and an employee’s own convictions”. 

“You’re so entwined. It’s got really tricky in my own mind now,” he said. 

Tim also feels the online world has hampered his ability to tailor a speech to a particular audience. “It has profoundly limited free speech.” 

And he laments the loss of “that private area where you work out where you’re at, rock on rock, stone on stone, sharpen and revise”. 

“I’m an extrovert, I process things aloud,” he said. “Anything can be tweeted in real time while you’re talking, before you’ve even finished your point.” 

Ideas about social media and the public expression of values are being put to the test with a federal government bill suggesting changes to governance standard three in the Australian Charities and Not-for-profits Commission Regulation 2013 to expand the scope of impermissible activities that registered charities must not engage in or promote others to engage in. 

Consequences are that charities will be stripped of their Deductible Gift Recipient status if an employee or volunteer commits a minor offence. 

For example, a charity could lose DGR status if a staffer put up a social media post in support of a rally that turned violent, or if a volunteer put stickers on private property. 

While it is widely understood that the proposed law is aimed at environmental groups, Tim Costello says the bill is “legislative over-reach” that would stifle all organisations’ ability to do advocacy. 

Certainly, such a law would impose a “one size fits all” approach to a varied sector and a huge range of behaviours when multiple lenses are vital. 

For organisations navigating these waters, it is essential first to clarify what they stand for and then to communicate these values to all stakeholders, particularly employees. When it comes to resolving problems, policies on social media and other out-of-work-hours behaviour provide a strong foundation, but complex situations require a flexible approach. Today’s solutions may need to be adapted to work in the evolving world tomorrow.