An Assessment of the World’s Largest Companies by Transparency International
Transparency International analyzed publicly available information from company websites. Building on the experience of two previous studies, Transparency in Corporate Reporting explored three dimensions of transparency:
- Public reporting on anti-corruption programs (ACP): covering bribery, facilitation payments, whistleblower protection and political contributions
- Organizational transparency (OT): including information about corporate holdings
- Country-by-country reporting (CBC)
Transparency International stated in its report that multinationals have a long way to go to improve transparency.
Business information companies are not included in the transparency rankings as they are not large enough to fit the 105 largest corporation criteria.
Based on annual reports of business information companies one can conclude that their country to country reporting is as obscure as their ITC peers. Note the position of Google, which is not very flattering.
Transparency International makes the following policy recommendations for corporations:
- Companies should publish detailed information on their anti-corruption programs
- Companies should publish complete lists of their subsidiaries, affiliates, joint ventures and other related entities
- Companies should publish individual financial accounts for each country of operations
- A transparent and informative corporate website available in at least one international language, should be the standard communication tool for all multinational companies
- In view of their significant impact, financial companies should considerably improve their reporting on all transparency-related issues and should, in particular, extend their anti-corruption programs to cover agents and intermediaries acting on their behalf and prohibit facilitation payments.
To the investor community and rating agencies:
- Institutional and private investors should demand reporting on anti-corruption programs, organizational transparency and country-by-country reporting and factor this information into their investment decisions
- Risk rating agencies as well as corporate responsibility indices should include company commitments to transparency measures as an integral part of their evaluation process
- Accounting standards relating to financial accounting as well as to corporate social responsibility reporting should include corruption relevant disclosures.
The highest performing companies were STATOIL (Norway, Oil & Gas), Rio Tinto (Australia/UK, Basic Materials) and BHP Billiton (Australia/UK, Basic Materials).
The highest performers in Anti-Corruption Programs (ACP) were BASF (Chemicals), BG Group (Gas) and STATOIL scoring 100%. The average score was 68%. There were three companies with rankings of 0%.
Forty-five out of 105 companies had a score of 100% in Organizational Transparency (OT). 72% was the average score and the worst performing score was 25%.
As stated above companies did not do to well in Country by Country (CBC) reporting with 50% being the highest score. Four percent was the average and for 41 out of 105 companies the score was 0%.
Transparency International feels that country by country reporting has not yet been the subject of regulatory attention. If companies continue on the road of obscurity they may one day get in the firing line of regulators. In that case it would be too late for making voluntary concessions.
Source: Transparency International