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Do employees think executives have something to hide?

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Directors must be open over their own pay and targets to avoid damaging employee confidence in their leadership. That’s the warning from corporate communications agency Fishburn Hedges as more and more executives come under the glare of the media spotlight.

“Leaders should not underestimate the importance of having the support of their people – and that commitment is damaged if they feel you’re being secretive” warns Nick Wright, head of Fishburn Hedges’ internal communication practice.

“Sensational headlines on pay and benefits may well alienate employees if they aren’t already in the know – particularly if the internal picture is more downbeat. Employers must recognise the danger and, like it or not, ensure greater transparency among internal audiences. If they don’t, they could find that shareholder criticism is reinforced by a collapse in confidence from the employees on whom their company’s success depends.”

Wright says that openness is key – even if there are some things that can’t be discussed. “Communicating targets, and an organisation’s progress against them, may sometimes be seen as price sensitive, and therefore can’t be disclosed. But executives should be prepared to say this if necessary, as part of an overall strategy to keep employees informed. Simply pointing to the relevant page in the annual report isn’t enough. This will only make it seem like executives have something to hide – and ignite the kind of speculation that puts any company on the back foot.”

Wright is advising employers to act now to protect themselves. “The scrutiny will only get stronger so encouraging greater openness is a key step towards disarming criticism and maintaining employee commitment and confidence. Employers must anticipate the issue and build a strategy for addressing any problems that arise.”

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