There are two words that dominate reputation discourse these days -- transparency and authenticity. Both are beginning to feel worn out, as dogma has a tendency to do when it lacks substance and proof.

But some companies give the words meaning. Writing in The Globe and Mail a couple of weeks ago, Fabrice Taylor congratulated Gold Fields Ltd. CEO Nick Holland for "revolutionizing the way the industry (gold mining) portrays itself. Here is what Gold Fields has decided to do:

"So Gold Fields management has decided to buck the industry trend and tell the company's owners the total cost of mining an ounce of gold, from operations (labour, power and so on) to capital investment (the cost of buying long-life equipment, extending a mining shaft etc.)"

what's the big deal? From a financial perspective providing information
on "total cost" gives shareholders a better sense of projected cash
flow since you have to make capital investments with, well, cash. (Naysayers will point out, as one analyst does, that this may allow you to game the numbers in the future simply by altering capital expenditures.)

important issue here is that Mr. Holland's actions are evidence of the transparency we have all been talking about at least dating from Don Tapscott and David Ticoll's book The Naked Corporation. Mr. Holland (disclosure - not a client) recognizes that admitting total costs gives a better picture of potential revenues, especially when gold prices are rising.

As my colleague Niall Cook writes in his new book Enterprise 2.0, some believe that transparency "simply doesn't reflect the real world" in which companies have no choice but to keep business secrets. The point, though, is that some like Mr. Holland are apparently looking for ways to gain trust, if not advantage,  by pushing reporting boundaries. The effect on share price, or buy-side analyst recommendations, may be slight, but the "trust" will stick to Gold Fields' reputation at least among some mining industry watchers and critics. And that in itself may mean being open around total costs will be worth it.

10 Downing St.

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