A new index published today by anti-corruption watchdog Transparency International reveals that while several British companies perform well on transparency measures, there is scope for improvement, particularly in the financial sector.
The index, which ranks the world’s 105 biggest companies based on their public commitment to transparency, reveals that five out of the highest ten scoring companies are British.
However, two major British banks score relatively poorly, and globally, the financial sector performs particularly badly:
- The 24 financial companies included in the report scored an average of 4.2 out of 10
- Low scoring institutions include Goldman Sachs (3.3), Bank of America (3.2), and the Bank of China (1.1) which is the lowest scoring company on the index overall. Lloyds Banking Group scores 4.6 and Barclays is the lowest-ranked British company on the index with a score of 4 out of 10.
- These results raise the question of whether the boards and senior management at the world’s largest financial institutions are truly serious about transparency and combatting corruption.
Chandu Krishnan, Executive Director of Transparency International UK, said “Companies need to be at the forefront of the fight against corruption through proper compliance with anti-corruption laws and good corporate citizenship. Opaque corporate structures, poor anti-corruption systems and lack of transparency create the conditions in which corruption can thrive. The companies at the top of the table show that transparency is achievable; governments, shareholders and ordinary citizens should be asking companies that are less transparent why they cannot match the standards of their peers.”
About the index
The report, Transparency in Corporate Reporting: Assessing the World’s Largest Companies, ranks 105 of the biggest publicly-traded companies worldwide based on their public commitment to transparency.
The index scores companies in three areas of public reporting by companies, including their anti-corruption systems, country-by-country financial reporting of corporate operations and a measurement of how open companies are about their many subsidiaries, units and other entities they control. Company scores range from 0 to 10, where 0 is the least transparent and 10 is the most transparent. The index is based on the average of results in all three categories.
- Chinese and Japanese companies perform particularly poorly, reflecting the results of the TI 2011 Bribe Payers Index in which Chinese and Russian companies were ranked as most likely to bribe in order to win business abroad. The Bank of China is placed bottom on the index with a score of 1.1. Gazprom, a Russian gas company, is the only organisation to score zero on Anti-Corruption Systems.
- 45 of the 105 companies score 100% on organisational transparency, showing that this is an attainable goal and raising the question of why so many companies have fallen short in this area.
- Although several companies are reporting on their anti-corruption programmes, only a few indicate that facilitation payments are prohibited and reporting on monitoring procedures tends to be weak.
- Country by Country reporting is weak in all companies featured in the index. Even the highest ranked company, Statoil, only scores 50% in this category.
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