Transparency: Is Less Always Worse?

While transparency is associated with benefits such as trust and accountability, it can also bring about risks such as information overload, politicization, and unintended strategic disclosures. This article takes a generic infrastructure capital allocation decision process and analyzes the benefits and risks of making all information transparent across all decision stages.

This text is part of the series on decision governance. Decision Governance is concerned with how to improve the quality of decisions by changing the context, process, data, and tools (including AI) used to make decisions. Understanding decision governance empowers decision makers and decision stakeholders to improve how they make decisions with others. Start with “What is Decision Governance?” and find all texts on decision governance here.

Case Study

Assume the following: Decision governance in an organization is such that it implements the decision making process which involves five stages: reaction, explanation, search, decision, and action. Each stage is defined as follows:

• Reaction: The stage when the decision maker has observed something that leads them to believe that they need to take action. At this stage, the decision maker has not decided yet what the right action should be.
• Explanation: The stage during which the decision maker is building an explanation of what happened, why it happened, and why the decision maker believes they need to take action in response.
• Search: The stage when the decision maker is identifying and refining options, each involving different possible actions the decision maker may be able to take.
• Decision: The decision maker commits to an option.
• Action: The stage during which the decision maker is performing the actions described by the option they committed to.

Suppose an organization has a decision making process for allocating capital to infrastructure projects. Assume that this decision making process has the five stages mentioned above, namely reaction, explanation, search, decision, and action.

1. Reaction Stage

The reaction stage is triggered by a signal or anomaly—declining performance, regulatory changes, or technological opportunities—that prompts a decision maker to consider whether a capital allocation may be necessary.

Transparency Benefits:

• Early Warning Amplification: Transparency at this stage allows multiple actors across the firm to contribute signals. Frontline workers, analysts, and middle managers can highlight issues that senior executives may not observe directly.
• Bias Reduction through Distributed Observation: Broader access to early signals allows cross-validation, helping to mitigate availability bias or overreliance on salient incidents.

Transparency Risks:

• Noise Accumulation: Excessive transparency may create a deluge of low-value or misinterpreted signals, overwhelming decision makers and obscuring priority issues.
• Premature Escalation: If early-stage observations are made widely visible without appropriate framing, it may cause unnecessary alarm, reputational risk, or political maneuvering.

Governance Implications: Decision governance should structure access to early-stage observations via tiered dashboards or structured forums (e.g., incident review boards) to filter and contextualize information before organization-wide dissemination.

2. Explanation Stage

In this stage, the decision maker constructs a causal narrative explaining what happened and why a response is warranted. This includes interpreting data, making assumptions, and attributing responsibility.

Transparency Benefits:

• Increased Trust and Buy-In: Exposing the rationale behind the need to allocate capital fosters organizational trust. Employees are more likely to support decisions they understand.
• Cognitive Diversity: Diverse perspectives can enhance the quality of the explanation. For example, engineers, finance professionals, and legal advisors may all contribute valuable causal interpretations.

Transparency Risks:

• Premature Attribution and Blame: Making incomplete or exploratory causal narratives public may lead to scapegoating or undermine morale.
• Strategic Misalignment: Different departments may interpret causal explanations differently, generating conflicting priorities or opportunistic framing.

Governance Implications: To manage these risks, decision governance should codify a protocol for releasing preliminary causal narratives, emphasizing provisionality and inviting critique in a structured manner (e.g., via red teaming or devil’s advocacy).

3. Search Stage

The search stage involves identifying and refining options for action, including cost-benefit analyses, risk assessments, and feasibility studies.

Transparency Benefits:

• Wider Option Generation: Transparency can crowdsource ideas and allow domain experts to propose alternatives that decision makers may not have considered.
• Legitimacy of Process: When employees can see that a wide range of options were examined, decisions are perceived as more legitimate and merit-based.

Transparency Risks:

• Option Proliferation and Analysis Paralysis: Making all options visible may increase political pressure to analyze low-quality proposals, extending timelines and diluting focus.
• Strategic Leakage: Some options may signal competitive positioning or internal weaknesses, which, if leaked, can be exploited externally or misused internally.

Governance Implications: Decision governance mechanisms should gate the visibility of options based on maturity and relevance, and adopt a tiered evaluation framework. Internal transparency must be counterbalanced by confidentiality protocols for sensitive alternatives.

4. Decision Stage

At this point, the decision maker commits to one of the options identified in the search stage. This is often accompanied by resource allocation and timeline commitments.

Transparency Benefits:

• Accountability and Clarity: Publicizing the chosen option and rationale signals leadership commitment and clarifies resource expectations throughout the organization.
• Alignment and Mobilization: Transparent decision communication enables operational units to coordinate actions and prepare for implementation with greater precision.

Transparency Risks:

• Exposure of Internal Trade-offs: Revealing why some options were rejected may lead to backlash from advocates of those options, creating political friction.
• Manipulation Risk: If stakeholders anticipate that final decisions will be fully transparent, they may attempt to influence the process strategically earlier (e.g., inflating projected benefits).

Governance Implications: Governance structures should formalize the publication of decision rationales, emphasizing evidence-based reasoning and explicitly documenting trade-offs, while protecting the identities of dissenters to preserve deliberative integrity.

5. Action Stage

The chosen option is now executed. This includes resource deployment, project management, and monitoring of progress against benchmarks.

Transparency Benefits:

• Performance Monitoring and Learning: Broad visibility of project milestones, risks, and outcomes supports real-time feedback and post-decision learning.
• Cultural Reinforcement: Transparency during execution reinforces organizational norms around delivery discipline and openness.

Transparency Risks:

• Blame Culture: Full transparency of setbacks during execution may discourage risk-taking or lead to public shaming, especially if contextual factors are ignored.
• Dynamic Undermining: If employees can see detailed execution data, they may challenge decisions midstream, causing fragmentation or deviation from the plan.

Governance Implications: Governance mechanisms should define thresholds for reporting execution progress, with structured after-action reviews to balance transparency and psychological safety. Focus should be on systems-level feedback rather than individual fault attribution.

Considerations At All Stages

1. Information Asymmetries and Social Hierarchies: Transparency initiatives must account for hierarchical power structures. Senior managers may frame information differently than operational staff, and unstructured transparency may unintentionally reinforce existing inequities.

2. Psychological Safety and Participation: Organizations that implement transparency without fostering psychological safety may see reduced participation, strategic silence, or defensive communication (Edmondson, 1999).

3. Cognitive Load and Signal-to-Noise Ratio: Transparency increases the volume of visible information. Without decision governance systems that prioritize relevance and actionability, stakeholders may become overwhelmed and disengaged (Speier et al., 2003).

4. Strategic Communication and Framing: The timing and framing of information release must be managed carefully. Early-stage transparency can support collective sensemaking, while late-stage transparency reinforces accountability and shared ownership.

Recommendations

1. Implement Tiered Transparency: Not all information should be equally accessible to everyone at all stages. A layered model—core team access, stakeholder review, and organization-wide visibility—can balance openness and manage risk.
2. Formalize Explanation Templates: Provide templates for causal narratives that identify assumptions, data sources, and known uncertainties. This supports clarity and invites constructive feedback without blame.
3. Structure Option Disclosure: Use internal white papers or sandbox platforms to allow safe development of options before wider distribution. This maintains option quality and reduces risk of premature political interference.
4. Codify Decision Rationales: Require that all capital allocation decisions include a formal rationale document, with anonymized dissenting opinions, cost-benefit analysis, and expected timelines.
5. Institutionalize Post-Decision Learning: Create structured after-action review sessions with rotating participation, and publish learnings in an internal governance journal to support collective memory and capability development.

References

• Edmondson, A. (1999). Psychological safety and learning behavior in work teams. Administrative Science Quarterly, 44(2), 350–383.
• Speier, C., Valacich, J. S., & Vessey, I. (2003). The effects of interruptions, task complexity, and information presentation on computer-supported decision-making performance. Decision Sciences, 34(4), 771–797.
• O’Neill, O. (2002). A question of trust: The BBC Reith Lectures. Cambridge University Press.
• Roberts, J. (2009). No one is perfect: The limits of transparency and an ethic for ‘intelligent’ accountability. Accounting, Organizations and Society, 34(8), 957–970.
• Bernstein, E. (2014). The transparency trap. Harvard Business Review, 92(10), 58–66.

Definitions

• Psychological Safety: A shared belief among members of a group that it is safe to take interpersonal risks, such as asking questions or admitting mistakes (Edmondson, 1999).
• Option Proliferation: The excessive generation of alternatives in a decision process, which can reduce decision quality by increasing cognitive load and diluting attention.
• Red Teaming: A structured practice in which individuals adopt adversarial or critical roles to identify weaknesses or blind spots in a proposal, common in strategic and military contexts.