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Corporate governance and reporting - Transparency International report

The largest companies are the least transparent

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Most of the world’s biggest multinational companies (MNCs) are failing to be transparent and are remaining highly secretive about their operations and financial data. 

In fact, 90 of the world’s 124 largest publicly-listed companies fail to reveal any information about tax payments in foreign countries of operation, and none of the largest Chinese companies disclose any financial data at all for the 59 foreign countries in which they operate.

These findings were revealed in Transparency International’s new report, which studied corporate reporting on three parameters – reporting on anti-corruption programmes, organisational transparency, and country-by-country reporting.

Seven of the top ten performing companies were from Europe, although Vodafone was the only company that scored at least 50% in all three parameters.

The average score across all companies was 3.8 on 10, pointing to a notable deficiency in making the full range of their corporate holdings and key financial information public for each country where they operate. Country-by-country reporting was the dimension with the weakest results.

“We need more transparency from multinational companies, whose power in the world economy closely rivals the biggest countries,” said Transparency International chair, José Ugaz.

Eight of the 10 worst performing companies were found in Asia, where 11 Chinese companies were found lacking in disclosing whether they have the corruption prevention measures common to higher ranking companies.

In contrast, companies from India, where legislation compels the disclosure of all subsidiaries, did consistently better than companies from other countries. Indian firms ONGC and Reliance were among the only four that disclose tax payments in almost all the foreign countries where they operate.

RELATED READ: Indian firms shine in corporate governance

Fourteen US-incorporated companies, including Apple, Google, Citigroup and McDonald’s were at the bottom of the rankings. In fact, the technology sector was one of the least transparent, which companies such as Amazon, Apple, IBM, and Google all scoring less than three our of 10.

Company leadership at Amazon, Apple, and Google was found lacking in publicly demonstrating support for anti-corruption on their web site. Neither Amazon nor Apple said whether they have anti-corruption training for staff, and Amazon was the only US company silent on its policy on gifts, hospitality and expenses, as well as on the channels it provides for whistleblowers.

However, all 44 US companies enabled staff to report corruption.

“With greater economic power comes greater responsibility. Bad corporate behaviour creates the corruption that causes poverty and instability. By not responding to people’s demands for greater transparency and accountability, companies risk harming their brand and losing customers.”

Image: Shutterstock



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