Creating value through transparency
The Australian Leadership Index (ALI) is a national survey that provides a comprehensive picture of perceptions of leadership for the greater good in the government, public, private and not-for-profit sectors.
The ALI model of institutional leadership for the greater good delineates three sets of indicators of leadership for the greater good that pertain to the type of value that institutions seek to create, how institutions create value, and for whom institutions create value.
For each of these indicators, we measure public perceptions and expectations. In addition to this, we calculate the relationship between perceptions of each indicator and overall perceptions of leadership for the greater good, yielding insights into the key drivers of public perceptions of leadership in the government, public, private, and not-for-profit sectors.
This note is part of a three-part series on how institutions create value. The focus of this note, the second in the series, is on transparency, which is the extent to which institutional leaders disclose information that is relevant to the public interest.
A note on the survey process
The results reported in this research note are the average of the results obtained from quarterly ALI surveys (1,000 people per quarter) between September 2018 and March 2020, which represents seven quarters of data collection.
Respondents are recruited via an online panel by Dynata and recruitment is designed to ensure that the sample is nationally representative in terms of locality (i.e., States and Territories), gender and age.
Results are analysed at the overall national level, as well as at the sector (i.e., government, public, private and not-for-profit sectors) and institution-level. ALI results can be further segmented according to a range of demographic variables. More information about the survey process can be found here and the ALI data portal can be found here.
What is the relationship between transparency and leadership?
Transparency is a buzzword of modern leadership and governance. Its use has increased exponentially since the 1980s and scarcely a day goes by when there isn’t some mention of transparency or, more precisely, the lack of accountability in our institutions, especially business and political institutions.
What role do public perceptions of transparency play in public perceptions of leadership for the greater good in the government, public, private and not-for-profit sectors?
ALI research reveals that public perceptions of transparency is a moderate-to-strong predictor, or driver, of perceptions of leadership for the greater good in the government, public, private and not-for-profit sectors. This means that the more institutional leaders are perceived as transparent, the more they are perceived to show leadership for the greater good.
In the context of enduring public concern about political and business ethics and persistently low trust in government and business, improving public perceptions of transparency is one way in which institutional leaders can restore public trust in these institutions and their leadership.
Transparency at the sector-level
Having established the relationship between transparency and leadership for the greater good, it’s pertinent to consider what ALI reveals about perceptions and expectations of transparency in the government, public, private and not-for-profit sectors.
The public have high expectations of the degree to which institutions in the government, public, private, and not-for-profit sectors should be transparent. Roughly two-thirds of respondents expect the government, public, private, and not-for-profit sectors to be transparent to a “fairly large” or “extremely large” extent.
The public sector is regarded as the strongest performer in terms of transparency, with 32% of respondents judging the public sector as transparent to a “fairly large” or “extremely large” extent. Consistent with this, the public sector is also associated with the smallest gap between perceptions and expectations of transparency (38-perceptage points).
The not-for-profit sector is a close second, with 28% of respondents judging this sector as transparent to a “fairly large” or “extremely large” extent. The private sector is associated with the second largest gap between perceptions and expectations (40-percentage points).
The government sector is seen the weakest performer on this criterion, with only 22% of respondents regarding government as transparent to a “fairly large” or “extremely large” extent. Consistent with this, the government sector is associated with the largest gap between perceptions and expectations (47-percentage points).
The private sector is perceived similarly to the government sector, with 24% of respondents regarding this as transparent to a “fairly large” or “extremely large” extent. This sector also has the lowest public expectations of transparency, which means this sector has the second smallest gap between perceptions and expectations (39-percentage points).
Figure 1. Perceived and expected transparency, sector-level, September 2018-March 2020
Explore this data for yourself via the ALI custom chart builder.
Transparency at the institutional-level
Considerable differences are found across institutions in terms of perceptions and expectations of transparency.
Charities are regarded as the strongest performer in terms of transparency, with 39% of respondents judging charities as transparent to a “fairly large” or “extremely large” extent. Charities are associated with the second smallest gap between perceptions and expectations of transparency (35-percentage points).
However, perceptions of charities differ markedly from the two other institutions that comprise the ALI measure of this sector; namely, trade unions and religious institutions. Both trade unions and religious institutions are perceived by only 22% of respondents as transparent to a “fairly large” or “extremely large” extent.
Although charities are associated with the most favourable public perceptions of transparency, public health and public education institutions are also well-regarded, with 35% and 34% of respondents, respectively, viewing these institutions as accountable to a “fairly large” or “extremely large” extent.
Within the private sector, national businesses and multinational corporations are viewed by 21% and 20% of respondents, respectively, as transparent to a “fairly large” or “extremely large” extent. Consistent with these, the institutions are associated with some of the largest gaps between perceptions and expectations. By contrast, the public expects less from small and medium enterprises (SMEs) and evaluates SMEs more favourably, which produces the smallest perception-expectation gap of all institutions measured by ALI.
Similar to national businesses and multinational corporations, the institutions of government are perceived as among the worst performers in terms of transparency. The Federal Government is tied with multinational corporations for the institution perceived as the least transparent of all twelve institutions measured by ALI. Specifically, only 20% of respondents view the Federal Government as transparent to a “fairly large” or “extremely large” extent.
State Governments do not fare much better. Only 22% of respondents view State Governments as transparent to a “fairly large” or “extremely large” extent. Consistent with this, the Federal Government and State Governments are associated with the largest gap between perceptions and expectations (i.e., a 49-percentage points). Local Governments are perceived as somewhat better than Federal and State Governments – 23% of respondents view Local Governments as transparent to a “fairly large” or “extremely large” extent.
Figure 2. Perceived and expected transparency, institution-level, September 2018-March 2020
Explore this data for yourself via the ALI custom chart builder.
Please note that full details about public perceptions and expectations of transparency in government, public, private and not-for-profit sector institutions are provided in the ALI 2019 Annual Report, which is available here.
