The world’s largest publicly-traded companies are reporting more than in the past
about their anti-corruption programmes but still need to do a lot more to increase
transparency in reporting on their operations, according to a new study by anti-corruption
group Transparency International.
A report published Tuesday by Transparency
International Transparency in Corporate Reporting: Assessing the World’s Largest
Companies scored 105 of the top publicly-traded companies based on their public
commitment to transparency. Listen to the full interview with Karen Egger,
Senior Manager, Private Sector Team:
“Multinational
corporations can and must play a significant role in the global fight against corruption.
As the world continues to recover from the deep economic pain of 2008, the leadership
at more companies must commit to stopping corruption,” said Transparency International’s
Chair, Huguette Labelle.
Company scores ranged from 0 to 10, where 0 is the
least transparent and 10 is the most transparent, and were based on public availability
of information about anti-corruption systems, transparency in reporting on how they
structure themselves and the amount of financial information they provide for each
country they operate in.
Overall, companies showed improvement in their reporting
on their commitments to anti-corruption programmes, as compared to a Transparency
International study of the same companies from 2008.
Norway’s Statoil, the
highest scoring company, scored 8.3. Statoil discloses significant information about
its anti-corruption programmes, subsidiaries, taxes and profits across its 37 countries
of operations.
Still, the study found that reporting by banks and insurers
on transparency measures underperformed across the board even though opaque company
structures played a contributing role in the recent financial crises and in spite
of a significant focus on fixing the lack of transparency in this sector. The 24 financial
companies included in the report scored an average of 4.2.
“If country-level
financial information is not adequately disclosed, it is difficult to know how operations
in many developing countries contribute to local governments. Experience has shown
that the requirement to report encourages companies to build strong management systems
supporting disclosures, and in the process improving their anti-corruption systems,”
said Jermyn Brooks, Chair of Transparency International’s Business Advisory Board.
A
lack of transparency makes it harder to identify where companies earn profits, pay
taxes, or contribute to political campaigns. The study shows, for example, that about
half of the companies evaluated do not disclose information about political contributions.
“The multinational companies remain an important part of the problem of corruption
around the world. The time has come for them to be co-leading the solutions. For this
they need to dramatically improve,” said Cobus de Swardt, Managing Director of Transparency
International.
Transparency International calls on companies to fight corruption
by disclosing more information about how they mitigate corruption and by making public
how they are organised and how monies flow in the countries in which they operate.
Only with this level of information can citizens the world over know how much money
flows into public budgets, a key issue of accountability for governments everywhere.
Governments
and regulators should make transparency obligatory for all companies seeking export
subsidies or competing for public contracts. Investors should demand greater transparency
in corporate reporting to ensure both ethical, sustainable business growth as well
as sound risk management.