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Transparency Reinvented

transparent

In the wake of the Great Recession, transparency was frequently bandied about by investment managers. For most, the increased attention to transparency was largely marketing/service driven, meant to allay the suspicions and heightened anxiety of shell-shocked clients. It typically took the form of:

1. Full disclosure of fees and expenses

2. Clearly stated and communicated investment process

3. Full communication of all underlying investment strategies and managers

One manager, however, has made transparency a core element of the organization’s brand and value proposition permeating both communications and operations.   Bridgewater Associates, ranked the world’s largest hedge fund firm by most sources, has a culture founded on “radical transparency,” an organizational principle that has grown in popularity as the internet and social media have facilitated rapid and wide-spread collection and dissemination of information and data.

“At Bridgewater each individual has the right and the obligation to ensure that what they do and what we do collectively in pursuit of excellence makes sense to them. Everyone is encouraged to be both assertive and open-minded in order to build their understanding and discover their best path. The types of disagreements and mistakes that are typically discouraged elsewhere are expected at Bridgewater because they are the fuel for the learning that helps us maximize the utilization of our potential.”

Examples among the 200 plus Bridgewater Management Principles of how this approach is applied include:

1. Almost all meetings are recorded and shared

2. Employees are expected and encouraged to express their opinions openly – speaking behind someone’s back is the behavior of “a slimy weasel”

3. Zero tolerance for dishonesty

4. Open expression of concerns and communication of mistakes

5. Share information whenever possible

Bridgewater Associates is not the only company to embrace radical transparency, but it has built its brand around it more comprehensively than most firms. Sometimes a new twist on an old term can result in a brand leader in more ways than one.