The flipside of corruption: transparency?

December 2012, Romania

For twenty years, Transparency International has been trying to identify, measure, and tackle corruption in over 100 countries and across industries. Now the organisation has decided to try a different angle, and ask how transparent (rather than how opaque, or unaccountable, therefore potentially corrupt) some of the world’s largest companies are.

The report, published six months ago, tries to ‘shine a light’ on the issue by looking at three criteria: a company’s anti-corruption programmes; the transparency of its governance structure; and whether or not it publishes detailed financial information in all countries where it operates. While most companies score reasonably well on at least one of the first two criteria, the third one proved to be a deal-breaker. And the reason for that is that the country-by-country financial reporting the research looked had to include not only general levels of income and expenses, but also details about taxes paid, community contributions, and any “special arrangements” the company may have entered into with local governments. Or, such things tend to be kept behind a veil of secrecy across the world and in all languages. The average score on this criterion was a mere 4%, while nearly a half (41%) of the companies scored zero.

Some say that the results of any such research are relative or skewed, as they inevitably depend on the way the questions / criteria are framed, and don’t take into account local cultures or customs (i.e. the fact that what counts as a bribe in one country may be considered a polite, necessary gesture in another). I think it is important to engage in such studies – not so much for the sake of their exact findings, but to ensure that difficult questions continue to be asked, and those in power (be that political or economic) remember that they, too, are accountable to the public.

The report, called “Transparency in Corporate Reporting: Assessing the World’s Largest Companies”, and published by Transparency International in July 2012, is available here.