Anti-corruption reporting: the first line of defence for companies
The European Commission recently announced a proposal that would require 18,000 European companies to be more transparent about their efforts to combat corruption and bribery by publishing details of how they go about this. This is good news. Anti-corruption programmes constitute a company’s first line of defence against corruption.
Full and transparent disclosure of anti-corruption programmes underscores a company’s commitment to countering corruption and enhances ethical conduct among management, employees, partners, agents and other relevant parties up and down the value chain.
Transparency International has long advocated for greater transparency in corporate reporting as part of a company’s dedication to fighting corruption. That’s why we have developed a way to measure how well companies are positioned to carry on that fight. We have identified three areas where companies can demonstrate the strength of their position to combat corruption. The first is reporting on their anti-corruption programmes. The other two are reporting on their organisational structure and their key financial data on a country-by-country basis.
Transparency in Corporate Reporting
In 2009, when Transparency International published its first report on the anti-corruption programme reporting practices of 500 major multinationals, they scored an average of 47 per cent.
In the July 2012 report Transparency in Corporate Reporting: Assessing the World’s Largest Companies, the score for the anti-corruption dimension had risen to 68 per cent – a marked improvement over the 2009 numbers. That study analysed the publicly available information from the company websites of the world’s 105 largest publicly traded multinationals.
While some multinational companies now report on certain aspects of their anti-corruption programmes, there is still significant room for improvement. For example, few indicate that facilitation payments are prohibited and reporting on monitoring procedures tends to be weak. The study found that three of the companies published all the prescribed information while three published none.
We encourage all businesses, both large and small, both listed and unlisted, to have comprehensive anti-corruption programmes in place and to make them publicly available. By adopting greater corporate transparency, companies provide the necessary information for investors, journalists, citizens and civil society to monitor their behaviour and hold them accountable.
Transparency International published in 2009 its Business Principles for Countering Bribery, which provided a blueprint for establishing anti-corruption systems. These principles, which form the basis for other similar codes and guidelines, show companies what the key components of a robust anti-corruption programme should be. The Business Principles are the product of a multi-stakeholder effort, including input from the business community.
Formalised and consistent reporting on anti-corruption activities, integrated into already established reporting processes (e.g., accounting), ensures reliable and measurable internal operations. It shows employees that the fight against corruption is taken very seriously (“What gets measured gets done”). This results in the following benefits:
- strengthening anti-corruption behaviour, including better risk management and compliance
- encouraging and supporting employees in resisting corruption
- providing management with a foundation for analysis of progress
- planning and continuous improvement
- motivating employees to be proud of their organisation.
Transparency International has updated the Business Principles and is currently seeking comments on the revised draft. The deadline for contributions is 27 May this year.
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