Most leading companies fall short of transparency expectations
Leading, publicly listed companies around the world are far from demonstrating embedded anti-corruption practices in their operations, according to a report issued today by Transparency International (TI).
While companies may often report high-level, strategic commitments to prevent corruption, they do not always provide meaningful details on the support systems required to meet such aims, TI found. The actual effectiveness of anti-bribery systems is distinct from mere reporting on their existence, yet such disclosure can be a strong indicator of the quality and comprehensiveness of a company’s efforts to address bribery and corruption.
“Public reporting is an essential link in the accountability chain and it is crucial for combating corporate corruption,” said Jermyn Brooks, Director of Private Sector Programmes at TI. “In the aftermath of the financial crisis, transparency is a key ingredient for companies seeking to restore public trust, but this can only happen if policies are implemented and reported on.”
The report, Transparency in Reporting on Anti-Corruption – A Report of Corporate Practices assesses the extent of reporting on strategies, policies and management systems for combating bribery and corruption implemented by close to 500 leading listed companies from 17 countries. Results are based on the analysis of publicly available documents and are aggregated by country and industry sectors. The average company analysed scored only 17 out of a possible 50 points and was awarded two stars out of a possible five. Only seven companies achieved the highest possible five star score.
The strongest averages were found in companies based in Canada, the United States, Switzerland, the Netherlands and the United Kingdom, with a three-star ranking out of a possible five. The weakest averages correspond to companies based in Belgium, China, Japan, Russia and Taiwan which achieved a one-star ranking.
“Some good practices have been found, but on the whole, companies still have a lot of reporting to do, particularly as socially responsible investors are demanding increased compliance, disclosure and accountability” said Brooks.
In terms of reporting across sectors, the ‘software & services’ along with the ‘drugs & biotechnology’ sectors achieved a comfortable three-star ranking. Sectors deemed at high-risk for bribery and corruption such as defence and oil & gas also achieved a three-star ranking but the data points to great differences in reporting practices by companies in these industries. The report also shows that Chinese, Indian and Russian companies in high-risk sectors are falling far behind their competitors in other countries when it comes to reporting practices.
“Non-financial reporting and more specifically, reporting on bribery and corruption, is still a nascent practice,” said Brooks. “Some companies have a head start but we believe that reporting has to evolve if company efforts to counter corruption are to be credible and offer some comparability.”
Transparency International is the civil society organisation leading the fight against corruption.
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