PRESS STATEMENT, 17 December 2013, Kuala Lumpur – On 17 October 2013 Transparency International (TI) released the new report ‘Transparency in Corporate Reporting: Assessing Emerging Market Multinationals’. The report details the findings of a survey performed in early 2013, when Transparency International conducted research into the public reporting practices of 100 emerging markets companies using the list of Global Challengers 2011 identified by Boston Consulting Group.
Based on the methodology of previous Transparency International studies, researchers collected and analysed publicly available data on three dimensions of transparency:-
- Reporting on anti-corruption programmes: covering inter alia bribery, facilitation payments, whistleblower protection and political contributions.
- Organisational transparency: including information about corporate holdings.
- Country-by-country reporting: including revenues, capital expenditure and tax payments.
The report showed that the average company score was 36 per cent and only one in four of the 100 companies achieved an overall score of at least 50 per cent.
The Malaysian national oil company Petronas was one of the 100 companies studied and performed comparatively well, coming in as number 5 with a score of 6.3 out of 10 (Scale 0-10 where 0 is least transparent and 10 is most transparent) of the global list of 100 companies, and scoring 100% in the area of Organisational Transparency. To improve the score further, improved transparency in their Country by Country reporting should be considered.
TI recognises that the business community of the emerging markets has an essential role to play in combating corruption. Transparency in corporate reporting is an important step forward in helping companies demonstrate their commitment to the international anticorruption programme, by playing their part in reducing corruption as these emerging economies begin to take a dominant position in the global economy.
TI-Malaysia (TI-M) calls on companies in Malaysia and across the Asia – Pacific region to improve on their transparency in reporting practices in the three key areas identified. The Emerging Markets Transparency Report will be repeated annually, with improvements in performance being clearly tracked.
To further improve overall integrity level of the business community, TI recommends the following:
- Emerging market companies to become more publicly accountable by recognising their responsibility to be transparent for the benefit of both domestic and international stakeholders.
- Emerging market companies to develop and implement best practice anti-corruption policies and programmes and publish comprehensive information on these programmes.Governments to strengthen the legal requirements for corporate disclosure and consider adopting rules for mandatory company reporting on anti-corruption measures.
- Institutional and private investors to demand reporting on anti-corruption programmes and factor this information into their investment decisions.
- Risk rating agencies to include transparency measures as an integral part of evaluation process.
- Civil society organisations to focus advocacy efforts on the business community to improve the depth and scope of their commitments to transparency, and in particular to improve their level of anti-corruption reporting.
We applaud steps taken by Petronas and other companies in Malaysia to take a stand for integrity through their anticorruption programmes and corporate reporting. Petronas is also ranked among Fortune Global 500’s largest corporations in the world, should improve transparency and aim to be top 3 of the list of 100 companies in the next survey on emerging market companies. We look forward to seeing further developments in 2014.
Issued by :
Dato’ Akhbar Satar, President
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Transparency International Malaysia Mobile : 017-256 0811
Dr KM Loi, Secretary-General
Email : firstname.lastname@example.org
Transparency International Malaysia Mobile : 012-303 6757