As the credit crisis sorts itself out, one outcome investors and regulators will almost certainly demand is more transparency into the strategy and the underlying operating and financial performance of companies—not only the financial ones at the storm’s center but all companies. Managers should enthusiastically embrace such reforms.

In our ongoing research into investor communications, we’ve concluded that companies should provide more detail about how their businesses create value, give an honest assessment of performance, and provide guidance on the most important operating metrics that illuminate what underpins value creation in the medium to long term. Too often, managers are cowed by fears that a more detailed discussion of the issues and opportunities facing a company would reveal sensitive information to competitors, generate too much work for the investor relations department, or create excessive pressure to report too many numbers or to meet unrealistic performance expectations. As a result, managers typically provide only the data required by generally accepted accounting principles—leaving the more detailed and specific performance and value contributions of the business’s various pieces hidden from investors, who are left to wonder what the company is hiding.

More transparency would benefit all investors but should prove particularly attractive to...