'Honesty Is the Best Corporate Policy

Building a bond of trust between all stakeholders, be it employees, clients or investors, helps tide over crises and generate goodwill.

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Being honest, transparent, and building trust with all stakeholders is the best corporate policy, and something that I have always followed. It helps the leader in difficult situations, and tackles those dark periods of uncertainty that loom over businesses from time to time. Much earlier in my career, I learnt that when honesty and transparency become a part of organisational culture, it becomes a disposition with a trickle-down effect. Above all, it builds a bond of trust between all the stakeholders, be it employees, clients, vendors, partners or investors.

A leader is the custodian of an organisation. He should develop and nurture talent and position his team for success. I believe in the spirit of stewardship, in leaving behind an organisation that is substantially better than what was inherited.

There comes a time when every organisation has to face hard truths. It could either be delivering lower than-expected results or bearing the brunt of a bad decision. It is not uncommon to see organisations sweep negative news under the carpet. Quick remedial measures to solve a problem, before it becomes public, don’t work. Truths cannot be hidden and, once known, can cause greater damage if not disclosed in a transparent manner.

Honesty becomes a critical partner while managing a crisis. In the last organisation that I worked for, there came a time when asset quality issues arose. We communicated these issues honestly and transparently to all the stakeholders. We neither denied their existence nor discounted the truth, which is unfortunately seen as a practice that makes stakeholders suspicious. We also gave shareholders a detailed plan of the corrective actions, and executed them in letter and spirit. Our strategy comforted stakeholders, who were already stressed due to difficult market conditions.