Transparency is often seen as a non-negotiable pillar of trustworthy leadership in any organization. But the idea that more information automatically builds more trust is a seductive oversimplification.

While transparency can foster trust, overreliance on it – particularly when used without context or consideration – can create confusion, reduce psychological safety and ultimately impair performance.

The transparency trap

Research on psychological safety by Amy Edmondson highlights that people need to feel safe to take interpersonal risks. Overexposure of conflict or uncertainty can undermine this safety, making teams more guarded, not less.

Similarly, William Kahn’s foundational work on engagement found that people disengage when they sense that the environment is unpredictable or potentially punitive.

When every misstep, internal disagreement or half-formed idea is exposed, employees may become cautious, defensive and less willing to speak openly. Consequently, transparency without narrative context can lead to misinterpretation and can stifle the very candor it is meant to encourage.

For instance, revealing raw financial figures or ambiguous performance metrics may prompt speculation and fear, especially when employees lack the strategic insight to decode them. In these cases, leaders are unintentionally outsourcing the burden of sense-making to team members who may not be equipped to do so.

Trust is more than information

Roger Mayer and colleagues argue that trust in leadership rests on three essential traits: competence, integrity and benevolence.

Leaders who recognize that trust is earned through consistency, discernment and sound judgment – not just openness – are better equipped to inspire confidence, especially in uncertain times.

People trust leaders who think clearly and act wisely, not those who simply share everything. In fact, unfiltered information often creates noise rather than clarity, and in any workplace, clarity is what drives purposeful action and meaningful results.

The case for strategic ambiguity

Strategic ambiguity is often maligned as evasive or opaque. Yet, when used deliberately and ethically, it can help leaders empower teams and maintain alignment without locking them into rigid answers.

In times of flux, leaders often cannot provide complete certainty. Attempting to do so risks creating a false sense of security that will eventually erode credibility.

By contrast, carefully applied ambiguity – paired with consistent values and clear priorities – can enable flexibility, foster ownership and encourage independent problem-solving.

Research by Eric Eisenberg describes strategic ambiguity as a communication tactic that facilitates unity and engagement by leaving space for interpretation, provided the overall intent is clear. In other words, ambiguity can help people rally around shared goals while navigating the gray areas with purpose.

Communicating ambiguity with integrity

The key is to be transparent about the ambiguity.

Leaders who acknowledge uncertainty openly and explain why flexibility is required tend to earn more trust, not less. It signals that the ambiguity is intentional and that the leader is still guiding the course.

Rather than providing all the answers, effective leaders anchor their teams around what matters most: shared principles, a clear destination and agreed decision-making criteria. This shifts the internal dialogue from “What exactly should I do?” to “What’s the right thing to do, given what we know?”– a far more empowering and agile frame.

Discernment over disclosure

Leadership today requires a different kind of communication acumen – one grounded in discernment. It’s not just about what you share, but when, how and why.

Selective disclosure, when done with clarity and intent, can foster more trust than a constant stream of information.

Rather than overwhelming teams with every data point or decision-in-progress, influential leaders curate communication. They frame updates with the necessary context, offer space for reflection and invite questions that surface what truly matters.

Next steps

In an era where uncertainty is the norm, leadership is less about having all the answers and more about creating the conditions for others to think clearly, act decisively and stay aligned.

Striking the right balance between transparency and strategic ambiguity isn’t about withholding truth – it’s about sharing the right information at the right time, in the right way. Leaders who master this balance build not only trust but also progressive influence within themselves, their teams and their organizations.

Opinions expressed by The CEO Magazine contributors are their own.