The 2013 ILM/Business in the Community joint report ‘Added values: The importance of ethical leadership’ identified a significant increase in public awareness of ethical standards. 77% of managers surveyed believed the public had higher expectations of UK organisations’ ethical behaviour than pre-recession. 86% thought people were more aware of companies’ ethical behaviour in all sectors.

Yet two years on the notion of integrity and ethical behaviour continues to fall short of the mark. There are the recent revelations at Volkswagen but they’re not alone; it could be in sports, business, politics, hospitals, education or, in fact, any other institution. There seems to be a continual flow of news stories breaking about yet another scandal. Time and time again in many of those stories it becomes evident a lack of transparency has meant it’s been easier to compromise integrity.

The business case for integrity

Integrity and transparency matter. Companies that genuinely value it, rather than just paying lip service to it, recognise how fundamental it is in achieving corporate success.

CEB (previously the Corporate Executive Board) research in 2011 found evidence that a culture of integrity leads to 12% greater employee discretionary productivity. And if employees feel their company’s integrity empowers them to report concerns without repercussions, then reporting rates go up and issues are resolved. Those companies know that transparency isn’t a risk. In fact, they understand it’s one of the most effective risk management tools there is.

The benefits extend beyond just those working for the company. The digital age means customers’ and other stakeholders’ expectations of openness and transparency are high. Opinions about what a company is really like – as a customer or employee – are public and easily accessible via social media. It’s impossible to hide – but companies shouldn’t want to. Because this transparency and the integrity it conveys is arguably one of the most powerful kinds of PR there is.

For example, Glassdoor’s survey of 2015’s most popular CEOs created significant positive publicity for the companies mentioned. Many of the CEOs head up companies where hierarchy is minimal and where collaboration and authenticity are valued. Dave Dyson, chief executive of mobile phone operator Three UK, had a 97% approval rating from his employees. The impact of engaging them through open, two-way communications had benefits not only in terms of achieving that 97% rating but also with increases in customer numbers and turnover and with improvements in customer service and business performance.

A great reputation increases loyalty from employees and customers and that increases bottom-line benefits.

Transparency builds trust

By becoming more open and honest, companies build trust. Successful leaders won’t be the ones telling employees what to do. Instead, it’s the managers and leaders who act as facilitators, and use their influence and relationship-building skills, who will have the most positive impact. They are the ones who’ll recognise and celebrate colleagues who do the right thing and give employees effective tools such as social recognition software to have open and honest conversations across the organisation. They understand that becoming increasingly more authentic and transparent requires a high degree of organisational self-awareness and that means being receptive to feedback from others.

Companies cannot afford to sit on their hands when it comes to integrity and transparency, it must become a key business priority. Finding platforms and mechanisms to help this happen has never been more important.

The good news is employee recognition platforms offer a way of doing exactly that. Social recognition genuinely gives employees a voice. Expressing views in a positive way reinforces company values. Employees clearly understand what desirable behaviours look like and are encouraged to champion them and make them their own.

When it comes to integrity it is undoubtedly important to have an open environment where concerns are reported. The longer term answer to creating a transparent organisation, however, goes beyond only reporting the problems. It lies in creating a culture where constant recognition of the right behaviours is at its core.