Why transparency in leadership is important for gaining employees’ trust
Nearly 45% of Australians say they lack trusted relationships at work, according to the TELUS Mental Health Index.
Almost four in ten employees say they are unsure whether workplace issues like conflict or harassment are addressed fairly.
These numbers tell an unfortunate tale of workplaces where trust is far more fragile than what leaders typically assume.
You’d think they point to dramatic leadership failure but it’s often everyday moments that gradually erode employees’ trust. A situation where action is expected but information is incomplete. A restructure is announced without any clear details. A change in strategy shared without context.
People expect transparency in leadership but when they do not have clarity on why decisions are being made or what they mean for them, they tend to lose trust in leadership.
The most effective way to minimise this trust deficiency is to offer transparency in leadership.
We’ll talk more about how to improve transparency but let’s first find out if your organisation has a trust deficit.
What trust deficit looks like inside organisations
The trust deficit builds gradually when leadership or internal communication leaves gaps that employees may fill themselves. It often makes room for rumours and speculation to quickly fill the vacuum which leads to subtle disengagement.
The warning signs often appear in behaviour before they appear in metrics:
- Rumour cycles replace official communication, especially after vague announcements
- Managers begin translating leadership messages because the original explanation lacked clarity
- Passive resistance or artificial harmony grows, where employees comply but question decisions privately
- Discretionary effort declines, as employees stop investing energy beyond what is required
Nokia’s then CEO Stephen Elop’s popular memo about the ‘burning platform’ is one of the greatest examples of tackling trust deficit by ensuring transparency in leadership.
Back in 2011, he was assigned the challenging task of communicating to the employees that the company was in troubled waters and their jobs might be at risk. “We too are standing on a burning platform and we must decide how we’re going to change our behaviour”, Stephen wrote in the memo.
He understood that employees can handle difficult news but what could potentially break their trust is vague, confusing communication.
Why more Australian employees expect transparency in leadership
“There are challenges like inflation, housing affordability, and job loss risks that are clear stressors, especially at the start of a person’s career when there is typically less financial stability,” Paula Allen, Global Leader, Research & Client Insights, TELUS Health, said in a statement. It should be no surprise then that TELUS Mental Health Index also found that employees under the age of 40 are more likely to report lack of trust in workplaces.
According to Mercer’s Global Talent Trends report, employee trust in organisations dropped from 82% to 72% between 2022 and 2024. This decline can be attributed to three major factors:
- Change fatigue
Organisational restructures, economic volatility and technological disruption mean employees are adjusting to new priorities more frequently than before. - Hybrid work
Hybrid environments have reduced informal conversations that were possible in common workspaces. This makes formal leadership communication even more important to understand the big picture - Uncertainty about the future
Market changes, AI adoption, and evolving business models mean organisations themselves are still figuring out their direction. Employees recognise this and expect honesty about what leaders know, what they do not know, and how decisions will be made moving forward
Transparency in leadership is not oversharing
Many leaders hesitate to practise transparency in leadership because they assume it means sharing everything. But the truth is employees do not expect every internal detail. They simply want to understand how decisions are being made and what would be the implications of those decisions on them.
Without this context, organisations often fall into the opposite extreme: information dumps. Leaders share large volumes of data without explaining what it means, or the core message changes as it is passed on through the hierarchy.
The Transparency Playbook — 5 practices leaders can implement
Building workplace transparency requires consistent behaviour shifts. Here are five simple but effective leadership practices that will help minimise trust deficit.
- Explain decision logic
Walk employees through the context behind a decision: the options considered, the trade-offs involved, and the final choice - Create a predictable communication cadence
Regular updates reduce speculation. When employees know when information will be shared, rumour cycles shrink - Close the loop on feedback
Explain what leaders heard, what changed as a result, and what did not - Equip managers with clear talking points
Managers often become translators of leadership communication. Providing FAQs and consistent messaging ensures teams hear the same explanation - Be clear about uncertainty
Sharing what is known, what is still being assessed, and when the next decision will be made helps reduce anxiety.
Even with the best intentions, leadership teams may find it challenging to communicate with clarity and develop transparency in leadership. Here’s something that can help strengthen their capabilities and build trust in the workplace.
How to rebuild transparency in leadership like a repeatable system
The O.C. Tanner Global Culture Report 2026, based on nearly 38,000 employees and leaders across 23+ countries, found that only about half of employees believe their organisations are truly transparent.
So, no matter how powerful your town hall and meeting room speeches are, trust doesn’t grow through words but through patterns employees observe over time. Consistency, fairness, follow-through and clear communication under pressure restore credibility.
But how can leaders ensure that they remain calm and maintain credibility when the risks are real and the stakes are high? We’ve trained leaders across the globe to navigate these complexities and improve transparency in leadership through our Breakthrough Leadership Programme.
Transparency is a leadership capability, not PR
The conversation about trust often begins with communication, but it ultimately ends with leadership behaviour. Transparency in leadership is not about sharing more information but about helping people understand decisions, trade-offs and direction.
At TransforMe, we work with organisations to help leaders practise effective communication and behaviour shifts through experiential learning, coaching, and real workplace scenarios.
If strengthening transparency and rebuilding employee trust is a priority for your organisation but you don’t know where to start, schedule a discovery call today. Let’s together evaluate how strong your current leadership communication is or are there any gaps that require immediate attention.
