Companies would benefit from being more transparent, says PWC

BUSINESSES should not be afraid to deal with bad news, according to one of the country's leading accountancy firms.

Speaking at a Cork Chamber of Commerce breakfast briefing yesterday, PriceWaterhouseCoopers senior partner Donal O'Connor said organisations would benefit from being more open and transparent and encouraged them to "tell it as it is" and accept that mistakes were a part of everyday business life.

Mr O'Connor said regulation had become a bigger burden for businesses in recent years, but that a culture where employees felt secure enough to report mistakes would prevent cover-ups. Organisations needed to foster trust so employees would feel comfortable bringing problems to light. This would benefit companies by minimising the potential for mistakes to go unnoticed over long periods and eventually becoming serious enough to threaten the company's business.

Mr O'Connor also called on organisations to improve their communication with key stakeholders. "My advice is that all organisations should adopt corporate social responsibility (CSR) and communicate non-financial as well as financial information to its shareholders, customers, employees and the market," he said.

Non-financial information would include details of the organisation's performance in areas such as customer satisfaction, staff retention and initiatives to help the environment. PWC recently set up a unit to help firms improve their CSR practices and reports strong interest from clients in developing formal procedures.

"What we're doing is encouraging organisations to make this part of their DNA," he said. Businesses were beginning to turn away from reporting the minimum detail necessary and instead understood the value of keeping employees, customers and other stakeholders fully informed. Recent PWC research found that over three-quarters of chief executives said CSR was vital for profitability. 79% of executives said CSR would help their corporate reputation and brands, while 69% said CSR would help make their company more attractive to employees.

PWC expects companies to make socially responsible practices an integral part of their business, a factor that will also contribute to improved risk management.