Keeping employees in the dark doesn’t protect your company—it undermines it.

A fascinating study from MIT found that companies with high information transparency saw a 38% increase in employee engagement compared to those with restrictive policies. Yet in countless boardrooms, the mantra “Just tell them what they need to know” lives on like a corporate zombie—mindless, but surprisingly hard to kill.

Let’s rip off the band-aid: This isn’t about efficiency—it’s about control. When leaders say, “Let’s keep this information contained,” what they’re really saying is “We don’t trust our people to handle the full picture.” It’s the leadership equivalent of putting your fingers in your ears and humming loudly, hoping problems will solve themselves.

And here’s what makes this especially maddening: The very act of withholding information creates three psychological dynamics that blow up in leaders’ faces:

1. Humans are natural meaning-makers. When we create information vacuums, our teams don’t stop seeking answers—they become amateur novelists, crafting stories that would make Stephen King proud. Research in behavioral economics calls this “ambiguity aversion,” where people prefer known negatives over uncertainty.

2. We dramatically overvalue what’s hidden. This is the “scarcity principle” in action: The mere act of withholding information turns mundane memos into the corporate equivalent of the Da Vinci Code.

3. Most critically, selective transparency sends a powerful meta-message: “We’re not really in this together.” This shatters what organizational psychologists call the “psychological contract”—the unwritten bond of trust between leaders and their teams.

Because what starts as strategic information management ends up transforming engaged partners into tactical clock-watchers faster than you can say “need to know basis.”

A Harvard Business School study found that companies with low transparency scores experienced 2.8 times higher turnover rates among their high performers. That’s not just a leak in your talent pipeline—it’s a flood.

Yes, radical transparency can feel like walking a tightrope without a net. But here’s the reality check: The cost of lost trust is far greater than the temporary vertigo of difficult conversations.

The most successful leaders I’ve studied don’t just share information—they invite their teams into the messy kitchen where decisions get cooked up.

They trust that informed employees make better decisions, not worse ones.

Transparency isn’t a risk. It’s an accelerant for trust, engagement, and performance.