When it comes to organizational transparency, Indian companies top.
By Sreekanth A. Nair
A new survey has found that Indian companies are the most transparent in the world while Chinese companies remain murky.
According to the latest edition of ‘Transparency in Corporate Reporting: Assessing Emerging Market Multinationals,’ by international anti-corruption NGO Transparency International, Indian companies tops the list of 100 companies in terms of organizational transparency.
Indian companies scored 75 percent or more to become the most transparent of the 100 companies covered in the survey.
“Indian companies have the highest average score of any country – they all score 75 percent or more – in organizational transparency largely due to the Companies Act,” said Transparency International in a press release.
The survey covered 100 fastest growing companies in 15 emerging markets and operating in 185 countries across the world. The companies scored an average of 3.4 out of 10 in terms of transparency. That fell slightly by 0.2 compared to the last survey in 2013.
As per the survey, Chinese companies scored the lowest score with an average of 1.6 out of 10. Only one Chinese company made it to the top 25, while seven Indian companies found a place in the top group. A total of 37 Chinese companies were included in the survey.
“Chinese companies, which account for a third of those assessed, had the weakest overall performance, scoring an average of 1.6 out of 10 with just one making it to the top 25. This again underscores the need for China and its business community to take immediate action to raise their standards,” said Transparency International.
The reasons behind the poor performance of Chinese companies are mainly attributed to weak or non-existent anti-corruption policies and procedures, or a clear failure to disclose them in line with international best practice.
Of the 100 companies, 75 were from BRICS countries (Brazil, Russia, India, China and South Africa). Companies from BRICS countries produce about 30 per cent of global GDP.
All the 19 Indian companies which were included in the survey scored 75 percent or more. Three Chinese companies scored zero out of 10. The bottom 25 group is also dominated by Chinese companies.
“Pathetic levels of transparency in big emerging market companies raise the question of just how much the private sector cares about stopping corruption, stopping poverty where they do business and reducing inequality. Time and again we see huge corruption scandals involving multinationals, such as Odebrecht Group or China Communications Construction Company, doing immense damage to local economies,” said José Ugaz, Chair of Transparency International.
“Through adequate transparency and anti-corruption measures and will from the top this could have been prevented. Although many companies say they want to fight corruption, this is not enough. Action speaks louder than words,” he added.