Trust, Efficiency and Corporate Transparency

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As corporations occupy increasingly powerful positions in all aspects of economic, political and social life, calls for greater corporate transparency have increased as well. These calls for greater transparency have become more pronounced with each corporate collapse or scandal that takes place on the international stage. Many scholars, business managers and regulators recognize, however, that excessive amounts of disclosure can actually impede rather than promote corporate accountability. With that background in mind, the paper addresses, from different critical perspectives, what level of corporate transparency might help limit abuses of corporate power and promote greater corporate sensitivity to the communities they inhabit. The discussion of corporate transparency covers both descriptive and normative elements of corporate organization and practice. From a normative standpoint, the paper assesses the nature of corporate transparency and its connection to accountability, disclosure and constituent participation in corporate governance. From a descriptive standpoint, the paper examines the relationship between corporations and other institutions that surround and affect corporate practices. To accomplish the goal of the investigation, the paper employs an interdisciplinary approach that combines economic theory with a philosophical analysis of trust, the basic principle underpinning the duties that corporate board members and managers owe to corporations and their shareholders. Trust, as a philosophical construct, however, remains incredibly broad and difficult to use effectively as an organizing principle. To rehabilitate trust as a useful organizing concept that could guide corporate decision making, the paper posits that a philosophical account of trust which also promotes economic efficiency could provide essential guidance. In particular, the paper argues that by implementing an “encapsulated account” of trust, corporations could limit agency costs and diminish the gap between manager and shareholder incentives, at least with respect to matters involving information disclosure and corporate transparency.


Keywords: Corporate Transparency, Accountability, Disclosure, Trust, Efficiency
Stream: Economics and Management
Presentation Type: Paper Presentation in English
Paper: Trust, Efficiency and Corporate Transparency


Dr. Michael Siebecker

Assistant Professor of Law, College of Law, University of Florida
Gainesville, Florida, USA

Professor Siebecker graduated magna cum laude from Yale University. He earned a J.D. and LL.M. from Columbia Law School where he was a James Kent Scholar. As a President’s Fellow at the Columbia University Graduate School, Professor Siebecker received an M.Phil. and currently remains a doctoral candidate in Political Theory. Prior to joining the University of Florida law faculty, Professor Siebecker spent four years at the New York firm of Cravath, Swaine & Moore as an associate in both the litigation and corporate departments. In addition, he has served as an arbitrator for the National Association of Securities Dealers and as an Appellate Administrative Judge for the NYC Environmental Control Board. Recently, Professor Siebecker represented a group of socially responsible investment firms as amicus curiae in Nike v. Kasky, a commercial speech case before the U.S. Supreme Court. Professor Siebecker’s research interests address the intersection of law and political theory, focusing primarily in the areas of securities regulation, business organizations and the Internet. His recent publications include “Building a ‘New Institutional’ Approach to Corporate Speech” published in the ALABAMA LAW REVIEW, “Corporate Speech, Securities Regulation and an Institutional Approach to the First Amendment,” appearing in the WILLIAM & MARY LAW REVIEW, and “Cookies and the Common Law: Are Internet Advertisers Trespassing on Our Computers?,” published in the SOUTHERN CALIFORNIA LAW REVIEW.

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