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I am sure I am not alone in wanting to believe the world is all about honesty and openness. Growing up, Barclays Bank was an institution in my eyes. I used to play with their stationary in my make believe world, pretending I was doing some important transaction. On Monday, Barclays Bank’s Bob Diamond, head of its investment banking business division, was accused of being too evasive as a witness by a Manhattan judge.  Legal action is currently being taken by Lehman Brothers against Barclays. It claims the UK bank did not disclose all the details of its acquisition deal to the courts when it acquired Lehman’s North American broker-dealer subsidiary in September 2008. In doing so, Barclay’s almost guaranteed seeing billions of profits from the transaction within months.

The fall of Lehman Brothers was said to have ignited a global economic crisis, of which, two years later, we are still trying to recover. Timothy Geithner, the U.S. Secretary of the Treasury wrote in a report about the Lehman Brothers’ debacle, that what is required is “better disclosure and transparency” to “reduce opportunities of accounting arbitrage.”

It seems transparency is the topic of the week here in Israel, too. Just a few days ago three companies were placed in the limelight for possible insider-trading.  The Globes reported that ordinary investors learned significant information about the relevant companies only after their share prices rose. The Holy Land affair is another recent case in point whereby corruption and bribery were exposed.

The word “transparency” has probably been overused over the last couple of years and yet, it would appear that for many companies, transparency is still elusive. Now more than ever is the most appropriate time for the Israel Securities Authorities to implement an Israeli version of the US Sarbanes-Oxley Act (ISOX). ISOX regulations passed legislation in the Knesset in December 2009. It aims to improve financial reports by Israeli public companies, so as to prevent any accounting arbitrage.

When information is transparent, the correct facts flow to all the necessary channels, preventing any misinformation or misrepresentation of issues in the media. This in turn helps retain credibility and helps steer public opinion. This sounds simple but in the real world, as we have seen, it is extremely difficult to implement and control, especially since a certain amount of secrecy is required to maintain a competitive advantage. Transparency, however, means that when any wrongdoing is revealed, immediate openness and disclosure is essential. This is the one act that can possibly salvage an organization’s reputation and help prevent any further damage from taking place.

Transparency is not “what” one communicates, but rather “how”. After numerous corporate scandals of late, I hope that no insider trading has occurred at any of these organizations. I trust though that if the reports are in fact true, we will not witness any evasion of the truth. Rather we can expect some fast-action, and immediate transparency from all those involved.