Will destroy your company. There is no place for secrets - especially in small close-knit teams. Secrets lead to speculation, gossip and worse - people leaving for the wrong reasons. It also gives employees the message that “you can’t handle the truth” or “you’re not in the inner circle”. Both these messages should be avoided.
This takes me back to a client-site I worked at a few years back. There were two team leaders across the various teams. One day one of the team leaders just stopped coming in. There were rumours of “disciplinary action”. But no announcement was made. When I asked the surviving team lead what had happened he said “We don’t talk about X”. I never saw team lead X again. It was like the company wanted to erase all evidence his existence. It felt like anyone could be “erased” at a moments notice.
This type of reality distortion just doesn’t work. It would have good to know what had happened to team lead X. After all how would we know not to do what he did? Unfortunately this was a missed opportunity to reinforce the company code of conduct or to behave in a decent way.
Secrets are about fear. If sharing some information with your employees has got you scared then you absolutely must share it with them. If they find out your secret from other sources or figure it out for themselves the consequences will be much worse.
And the most important reason not to have secrets is because it’s not a decent way to operate any company.