The largest publicly traded multinational companies have increased their reporting on anti-corruption programmes, but more needs to be done to improve transparency, according to a report by Transparency International (TI).
TI ranked 105 of the world’s top publicly traded companies based on their public disclosures around transparency. TI ranked companies on scores ranging from 0 to 10, with 0 being least transparent and 10 most transparent, ranked on how the companies are structured and the amount of financial information provided for each company in which they operate. Norway’s Statoil was top rated ,with a score of 8.3. Rio Tinto and BHP Billiton came in ranked in second and third place, respectively, both with scores of 7.2.
Companies were ranked on three areas – “public reporting of anti-corruption programmes based on the Transparency International – UN Global Compact Reporting Guidance on the 10th Principle against Corruption, disclosure of organisational transparency in corporate holdings including subsidiaries, affiliates, joint-ventures and other holdings and country-by-country reporting on basic financial data and community contributions,” according to the report.
“Multinational corporations can and must play a significant role in the global fight against corruption,” said Transparency International’s Chair, Huguette Labelle. “As the world continues to recover from the deep economic pain of 2008, the leadership at more companies must commit to stopping corruption.”
Statoil, Rio Tinto and BHP Billiton were the only companies to score in the top 10 in each of the three dimensions of transparency.
Meanwhile, a separate section of the report examined the financial services sector on its own, based on full transparency on anti-corruption programs, with 0% meaning no transparency and 100% on full transparency. Westpac Bank had the highest score within the financial services sector, with 96% transparency on anti-corruption programmes and an overall score of 6. ANZ Banking, with an 88% score, was the fourth most transparent global financial services and had an overall score of 6.3. Commonwealth Bank was judged to have a 38% score for transparency on anti-corruption programmes and an overall score of 3.1.
“The best performing financial institution was Westpac Banking Group, which achieved a close to maximum possible score, missing only half a point in monitoring its anti-corruption programmes,” the report said. “The large disparity in scores reflects the fact that such reporting is mostly voluntary. Financial companies, although highly regulated, are generally free to choose the level of public disclosure regarding their anti-corruption programmes.”
Banks and insurers underperformed when it came to transparency measures around anti-corruption. There were 24 financial companies included in the TI report, with an average score of 4.2. Financial companies also underperformed when it came to country-by-country reporting.
“If country-level financial information is not adequately disclosed, it is difficult to know how operations in many developing countries contribute to local governments,” said Jermyn Brooks, chair of Transparency International’s Business Advisory Board. “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.”