Corporate transparency
July 10, 2012
Transparency International (TI) has for the first time released a detailed list looking not at state-level corruption, but rather at irregularities in the corporate reporting of individual companies. Under scrutiny were the world's 105 largest publicly-traded firms. The companies and their respective subsidiaries are active in altogether 200 nations around the globe.
The study showed that although many multinationals have implemented anti-corruption programs and given protection to whistle-blowers, they remain vague when reporting details on profits and tax payments, according to Edda Müller, the head of the German branch of Transparency International, who spoke with reporters in Berlin on Tuesday.
TI's survey is based on a Forbes list of the 105 biggest enterprises in the world. The anti-corruption body specifically looked at the companies' own codes of conduct and measures to fight corruption. It also assessed regular business reports and statements about tax payments, with the data used coming exclusively from publicly accessible sources such as company websites.
Natural resources companies lead the field
Norway's energy conglomerate Statoil emerged as the best firm in the field, followed by the British-Australian mining company Rio Tinto. Bringing up the rear were two Chinese lenders, notably the Bank of China and the Bank of Communications.
Robin Hodess, TI's director of policy and research, said international standards and norms had yet to be incorporated into the daily business routines for those companies at the bottom of the table. She added, though, that the learning curve could be steep.
"Last year, China adopted laws directed against corruption abroad and thus brought the country in line with the OECD's rules against corruption," she said.
Hodess was quick to add, however, that there wasn't always a direct correlation between transparency levels and a company's place of origin, mentioning that among the worst performers in the index were Japan's Honda Motors and US giants Google and Apple. Microsoft and Amazon also ended up in the bottom third of the group, according to the report.
Little transparency in the finance sector
Firms in the finance sector didn't quite make the cut in the survey either, with Goldman Sachs, Bank of America, Visa and Citigroup all ranking in the bottom third.
"In our view, this confirms the need for more regulation and binding corporate reporting standards in the finance sector," said Müller. "You can't pocket taxpayers' money in the form of bailouts, while at the same time refusing to publicly document the tax payments in the countries you operate."
TI's list also includes seven German companies, among them software giant SAP, chemical conglomerate BASF and insurer Allianz. All of them did relatively well, securing themselves spots in the top third of the index. Following a large-scale investigation into corruption surrounding German electronics company Siemens in the US, many German firms have taken additional anti-corruption measures, said TI.
However, Müller said German companies still left much to be desired when it came to documenting their business activities abroad. TI criticized the German government for not immediately implementing a recent EU guideline, which would oblige companies in the natural resources sector to make their investments more transparent.
Author: Mathias Bölinger / hg
Editor: Martin Kuebler