Corporate Secrecy: Bad For Business


Companies most guarded about succession plans, often failing to communicate about training and leadership programs.

A sense of mystery may be appropriate for horror movies, but it is certainly unsuitable for human resources departments and the company’s long-term health.

Secrecy continues to be a general business practice, especially at the top of the organization, according to a survey by AMA Enterprise, a focused division of American Management Association.

Lack of transparency prevents an alignment of employees with the business approach, and can result in a system that is “certainly counterproductive, and potentially even destructive,” said Sandi Edwards, Senior Vice President for AMA Enterprise.

The most closely guarded company secrets are succession plans and leadership development. Although companies have been progressively more open in regards to many Human Resources policies and processes, nearly half of the organizations surveyed say there is a smaller amount of transparency when it comes to succession planning.

“There’s an understandable sensitivity about who is identified as a high-potential leader, but if the process is mysterious then selection may come across as political or at least capricious, and this is certainly counterproductive, and potentially even destructive.”

Forty-six percent of those surveyed said their company is “not at all” transparent in succession planning, while 43% said theirs is “somewhat” transparent. Only 11% said their organization is very transparent on this initiative.

The selection process and standards are also cards played close to the chest; 38% keep their high-potential selection criteria secret. Another 28% said they do not share information on admission to leadership programs.

When it comes to the findings of employee surveys, 41% of respondents claim their organization is highly transparent, while 35% reported transparency on corporate strategy.

AMA Enterprise, provides companies and government organizations with training solutions, conducted the survey of 300 executives to examine the movement toward greater transparency in employee development and career management.

The results of the AMA transparency survey:

Data: AMA Enterprise

More openness about the process of developing leaders leads to higher engagement and a sense of fairness in the treatment of employees, concluded Edwards. She encourages companies to be open about choosing leaders, and allow employees to understand their role in the company.

“This would only help to align employees with the business strategy,” Edwards said, “and foster a sense of purpose and commitment at the individual level.”

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