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Why does transparency matter in corporate governance?

Transparency matters because it gives shareholders and other stakeholders clear, accurate, and timely information about a company’s performance and risks. Companies may disclose business practices, supply-chain relationships, operational progress, ethical-oversight policies, environmental performance, and social initiatives. This information helps people hold companies accountable for stated goals. Shareholders can also support measures such as linking executive compensation to sustainability objectives to encourage leaders to follow through on their commitments.