Large companies found wanting
16 July 2012 | JEANETTE CLARK
This is one of the conclusions by Transparency International (TI), the global coalition against corruption.
In the fight against corruption, TI endeavoured to measure the reporting transparency levels of the 105 largest publicly listed multinational companies in the world.
The premise is that if you are as transparent as you can be, it would be easier to spot corruption and thus more difficult for perpetrators to commit.
The rankings and members of the list of 105 may be a bit outdated as the companies selected was based on the 2010 ranking of the World’s Biggest Public Companies published by Forbes, but it does show some interesting findings on what is inarguably some of the largest companies in the world.
“Countries around the globe are struggling to rebuild economies devastated by the financial crisis. Yet many of the world’s largest publicly traded companies still do not demonstrate that they have put enough transparency measures in place to help prevent another economic meltdown,” TI states in the report.
“These companies continue to publish too little information about their commitments to comprehensive anti-corruption systems and their sprawling operations. They also report insufficiently on their corporate structures, preventing clarity about their true impact in countries around the world.
“As a result, the world’s largest companies may contribute to an environment in which corruption can thrive.”
The three categories that the study explored were firstly reporting on anti-corruption programmes, secondly organisational transparency and lastly country-by-country reporting.
The average score in the first category was 68%.
“Full and transparent disclosure of such (anti-corruption) programmes underscores a commitment to countering corruption,” the report reads.
In the second category only a few companies disclose their affiliates, joint-ventures and other holdings.
“As a result, many related entities remain hidden from public view and scrutiny.” TI finds. The average score for this category was 72%.
In the last category all the companies fared dismally with an average score of only 4%.
Only two of the companies on the list of 105 are listed in South Africa as well – BHP Billiton and British American Tobacco.
BHP Billiton, with an overall third highest index score of 7.2, scored quite high in all three categories, getting 92% for reporting on anti-corruption programmes, 100% for organisational transparency and 23.6% for country-by- country reporting.
British American Tobacco scored 81%, 100% and 2.3% respectively. Its index score is 6.1.
Although these are the only two companies that are listed on the JSE, many of the other companies either have links with South Africa, operate in the country or sell their products here.
For example, it is interesting to have a look at Barclays, especially in the context of the recent developments around the Libor scandal and the fact that it is the majority shareholder in South Africa’s largest retail bank, Absa.
Barclays scored 69%, 50% and 0.8% respectively and an index score of 4, among the lower scores from the 105 companies, but an average score for the group of financial companies that formed part of the companies scrutinised in the study.
Other interesting companies include Apple (with an index score of only 3.2), ArcelorMittal (6.9), Google (2.9), Vodafone (6.4), Wal-Mart (6.4) and Rio Tinto (7.2).
The companies surveyed have a combined market capitalisation of more than $11trn and operate in more than 200 countries worldwide.
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