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Transparency: When Is It Too Much?

By Jeffrey Shields posted 27 days ago


CEO Notebook |

Just enough transparency from the business office helps engage key stakeholders in important discussions, but too much can stifle participation and understanding.

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Jeffrey Shields, FASAE, CAE
NBOA President and CEO

I’m a fervent believer in transparency. When I speak to business officers, I urge them to communicate the school’s financial position to faculty and non-financial staff. In fact, I believe this is one of the most important abilities of an impactful business officer. Why? Given the economic pressures on independent schools, we need our best thinking from the entire school community.

Informing colleagues of the school’s fiscal strengths and vulnerabilities makes them feel valued, and perhaps most importantly, more confident discussing school business matters and thus a better partner for the business office. Open communication can build trust and understanding within the community, and help the entire enterprise achieve long-term financial health.

In fact, the goal of NBOA’s online course Budget Meets Mission is to help administrators understand the language of school business and finances so that they can contribute to these important conversations. Course participants more fully understand the independent school business model, in which more often than not the published tuition price does not cover the cost to educate a student. They learn that net tuition revenue is derived from calculating all tuition revenue collected annually, minus tuition offsets like financial aid and tuition remission, divided by each enrolled student. And so on.

The goal of business officers, and by extension the finance committee, is not to share everything they know, but rather everything the board needs to know.

At some point, however, transparency can turn from a strength to a liability. I have observed this a few times firsthand. I remember visiting a board of trustees meeting where the finance committee made a presentation of all the data that informed the budget. I mean all the data — the meeting lasted until 11 p.m. The goal of business officers, and by extension the finance committee, is not to share everything they know, but rather everything the board needs to know. At another school, I observed a preliminary budget discussion with the board of trustees, in which one of the numerous line items detailed the need to increase foreign languages faculty by one half-time employee. Again, the staff’s intention was simply to be transparent, but at this altitude, the board will likely have trouble remaining strategic and future-focused, not operational.

Understanding how to navigate transparency effectively can be challenging, which is why I read with great interest this Entrepreneur magazine article, “How Much Should You Tell Your Employees?” It raises important questions that help moderate our good intentions and identify when transparency is helpful to our school culture and when perhaps it’s not. Here are a few of my key takeaways:  

No one person needs to know everything. If you work with colleagues that have a high “need-to-know” threshold, remember that your responsibility as a leader is not necessarily to tell everyone everything you know (which would be nearly impossible), but to share all the information colleagues need to do their jobs successfully. There is a big difference. The information a new hire receives at a staff orientation will be different from what a 10-year faculty member receives at a leadership meeting. The new employee can’t possibly absorb as much information as he or she works to understand a new school. A veteran faculty member, however, is invested in the school’s success and may wish to deepen his or her understanding of the enterprise.

Find a middle-ground. As you may surmise from the board examples above, there is such a thing as too much information. This overload has the unwanted potential not only to invite board members into school operations, but also to overwhelm them, resulting in disengagement from important financial matters that require full attention.

Transparency is not just top-down, but also bottom-up. In a transparent culture, everyone bears responsibility to communicate — not just the senior administrative team, but also the parent-student association, student government and faculty work groups.

While you lead your school through these complex financial waters, I hope that you don’t fall into the transparency trap, but instead serve with the amount of transparency that best fits your school culture and enables your school to achieve success!

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Follow NBOA President and CEO Jeff Shields @shieldsNBOA.
From Net Assets NOW, April 23, 2019. Read past issues of CEO Notebook.

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