This article is written by John G. Keogh.
Conventional wisdom suggests that transparency is an irrefutable practice in public and private sector governance (1). In fact, transparency is viewed as foundational for the efficient functioning of markets and provides a bedrock layer for trust to function as a ‘social lubricant’ by reducing information asymmetry (2). Although there is a complex bidirectional relationship between transparency and trust, increased transparency increases trust, according to a growing number of empirical findings and industry research.
“Trust is in Crisis” Edelman, 2017 Trust Barometer
The recurring exposures of deceptive practices, ethical lapses as well as opportunistic and immoral behaviour by individuals, governments, media, NGO’s and businesses has catapulted transparency into global prominence especially in the food industry.
No doubt you would concur that we have ideological and biased reporting, allegations of ‘paid-for’ scientific publications, deceptive practices, fake news and then there is the viral nature of social media to spread the falsehoods.
With all this going on in the background, sceptical consumers continue to raise their concerns about major social issues related to sustainability of natural resources and habitat destruction of endangered species. A key question raised often is whether the 3rd party certifiers are independent and unbiased, whether their results are peer-reviewed and can be trusted. And more importantly, can they be trusted when they rely on the firms they audit for revenue?
Research by Graham Bullock (2015) on 245 eco-labels and sustainability schemes in the USA found only 2 firms met criteria of being independent, had qualified staff (PhD level experts) and their results were peer-reviewed. He further noted that 56% of Americans do not trust companies’ green claims. Bullock’s insightful research was based on the findings from Starobin and Weinthal (2010) who found competency issues with 3rd party certifiers for Kosher labels.
Furthermore, consumers have legitimate concerns spanning from fair trade to the immoral acts of human slavery and forced child labour in our food chains. On top of concerns for animal welfare and a growing fear of antibiotic resistance, consumers are suffering from a lack of consensus among the public health agencies, NGO’s and the food business operators on the long-term health and safety of common foods. Again, whom can they trust?
do you remember the 2015 ‘processed meat causes cancer’ from the WHO? It seemed well grounded in scientific evidence but after significant push-back from industry, there was consumer confusion followed by a partial retraction by WHO a few days later. Who can the consumer trust to provide transparent, and trusted information? Unbiased reporting and evidence-based recommendations? Was the retraction the result of an industry lobby to protect revenues or grounded in sound science?
When transparency is lacking, so is trust!
In my view, the problem today is a lack of a transparency culture throughout the food ecosystem. But my question is; who is hiding what and why are they doing it? Following on from that, it is no wonder (at least to me) that Edelman argues that trust is in crisis. The challenges we are now faced with is ‘whom’ do we trust, and ‘what information’ can we trust? And my question is, therefore ‘can a transparency culture help’? I think it can.
The Merriam-Webster dictionary defines transparency as the “quality or state of being transparent”. And ‘transparent’ is defined as “having the property of transmitting light….” and “free from pretense or deceit”, “easily detected or seen through”, “readily understood,” “characterized by visibility or accessibility of information especially concerning business practices”
What is a Transparency culture?
Much like a food safety culture which is brilliantly outlined in several books by Frank Yiannas, VP of Food Safety at Wal-Mart, in my view, a transparency culture is essentially about human behaviour. Regardless of laws, regulations, standards and organizational SOP’s, a transparency centric culture means doing the right thing when nobody is looking. And when they are looking, to accept responsibility and accountability.
A transparency culture should extend throughout the organizational ecosystem and is critically important to the boundary spanning employees who engage in direct communication and business transactions with stakeholders. A transparency culture is also about honest, forthright, clear and understandable communications, not hiding details in the fine print or providing scientific or technical language that consumers cannot normally decipher.
An example of a Transparency Culture fail
A transparency culture in the food chain is not only about the food itself but also related to business practices which impact consumers negatively. In the past week, Canada’s premier retailer, Loblaw received immunity from prosecution as the whistleblower on more than a decade of industry practices of collusion and price-fixing for bread. This ethical and immoral lapse was not just one person but a whole supply chain colluding to cheat consumers and break Canadian anti-trust laws. Will a Blockchain fix this? Nope.
This illegal practice will be costly for Loblaw and others, and not just financially. It will take time for consumer trust to bounce back. Loblaw is booking a CDN$ 150 million charge this quarter to appease angry consumers with a 25-dollar ‘mea-culpa’ voucher. Unethical behaviour doesn’t pay and will get exposed eventually.
‘‘Transparency is the deliberate attempt to make available all legally releasable information—whether positive or negative in nature—in a manner that is accurate, timely, balanced, and unequivocal, for the purpose of enhancing the reasoning ability of publics and holding organizations accountable for their actions, policies, and practices” Rawlings (2009)
How do we fix this?
The entire food ecosystem needs a rethink on transparency as an enabler of consumer trust. From farm to retail we should consider how to put into practice a program, or programs to ensure ‘transparency as a culture’ is embedded in all aspects of the food chain.
A lofty goal right? Why am I proposing this? well, no government or enforcement agency can control or govern all aspects of our complex society. Therefore, voluntary measures such as those embedded into a corporate social responsibility (CSR) program becomes an alternative, non-state mechanism to address these societal issues and concerns broadly (5). And specifically, issues such as food safety, food security, food fraud and price fixing – the latter being one of those issues where consumers, regulators and insiders alike probably shake their heads in dismay thinking that was a thing of the past.
Embarking on a CSR journey focused on implementing a transparency culture is one way for an organization to publically state, ‘we are taking responsibility’ and ‘we are accountable’ for addressing these big-hairy societal issues and also the specific issues of food safety, fraud and deceptive practices. By the way, transparency is viewed in the discourse as fundamental to the implementation of successful CSR, which, if not managed ethically, becomes just another tool for an organization to peddle untruths such as greenwashing (fake sustainability claims).
Finally, in a transparency culture, whistleblowing at all levels should be encouraged to continually improve processes by shining a light in the opaque areas of the food chain where unethical, immoral, deceitful and illegal behaviours are most rampant. This is no doubt a marathon, and the food industry is likely still at the start line without a race plan.
Thanks for reading.
About the Author:
John G. Keogh is a sought-after speaker, advisor and researcher. Operating at the intersection of the Public + Private sectors globally, he provides confidential advisory, research & interventions across policy, operations, strategy and technology.
John holds a PG Dip. and an MBA in General Mgmt. He has an MSc (distinction) in Business and Management Research into Supply Chain Transparency and Consumer Trust. He is currently a part-time, associate researcher at Henley Business School, undertaking doctoral (DBA) research into food chain transparency and consumer trust. John plans to publish an ebook “Food Chain Transparency – what executives need to know” in 2018.
(1) Welch et al., (2006), (2) Berg (2004). (3) Rawlins, (2008), (4) Penders et al., (2017), (5) Dubbink et al., (2008), plus in-text references.
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