Transparency and Secrecy: Corporate Information Strategies Under Competitive & Stakeholder Pressure

Stakeholders increasingly pressure firms for action and performance along issues of concern; transparency is a primary mechanism by which firms communicate about these issues with stakeholders. But firms face a tension between satisfying stakeholder demand for greater transparency and maintaining secrecy when those relevant issues are focal to firm motives for information asymmetry or competitive advantage. This study addresses different strategies firms employ to balance stakeholder and competitive pressures for greater transparency with maintaining secrecy. We develop a typology of secrecy strategies along dimensions of non-financial performance with general relevance to multiple stakeholder groups, hypothesize several antecedents of these strategies, and test those hypotheses using rigorous empirical analyses of firm participation in a prominent voluntary disclosure mechanism. Findings indicate that firms employ different modes of secrecy strategies depending on the prevalent modes of external pressures for transparency. The study contributes to extant theory in competitive secrecy and transparency strategies, and provides insight into nature of secrecy strategies for non-financial information disclosures.