January 12, 2006
News & Opinion: Our Translation of Sarbanes Oxley
But financial transparency isn't just about numbers. It is also about ethics and accountability, and about communication and education. Financial transparency helps to address these two key issues inside a company:
- Employees must trust that management is telling them the truth, and
- There must be a common language used throughout the organization to talk about the business.
Effective corporate financial transparency can help to transform an organization around these issues. When employees, managers and leaders understand how the company makes money, how it measures financial success, and its current results and goals, trust increases and communication improves. Employees see that their work makes a difference, and managers and leaders have the opportunities to talk about the current situation and how their department or area of responsibility can make a difference in improving the results. Financial transparency, which consists of educating everyone about the numbers and then sharing the numbers on a regular basis, creates a trusting environment and a common language.
We believe that financial transparency truly does mean there is less likelihood of another Enron. It is interesting to note that virtually all of the corporate scandals were uncovered by an employee inside the company, someone who understood finance and accounting, saw that something was wrong, and spoke up.
Here is an example of a frontline employee understanding the policies of the company, and speaking up.
And here is just a little bit of background on the person who "blew the whistle" at Enron.
About Dylan Schleicher
Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.