The Dual Role of Leadership in Shaping Workplace Transparency

Do leaders affect workplace transparency? We conduct an experiment to study how leaders affect the way in which workers report a monetary outcome. We find that workers are more likely to choose transparent reporting – rather than self-reporting – when their leaders voluntarily act in a transparent manner and exert economic incentives. That said, leaders often hide information and punish workers who rather go transparent. Collectively, our results show a double-edged effect of leaders on workplace transparency: while workers are prone to follow leaders' actions, there is a dark side of leadership that may exacerbate, rather than fix, fraudulent behaviors