Indian companies have the highest ratings for corporate transparency among the BRICS, according to a recent Transparency International study, which examined public reporting practices of 100 emerging market companies.
Out of a maximum score of 10, signifying most transparent, Indian companies scored 5.4. South African companies were second with a 5.1 score, followed by Russia (4.3), Brazil (3.4) and China (2).
“Results show that companies from China lag behind in every dimension”, the study said.
Looking at the broader context of emerging markets, the study ranked individual companies and found that the top performer overall was India’s Tata Communications with a score of 7.1.
Results show that companies from China lag behind in every dimension
Transparency International study
Three-quarters of the emerging market companies scored less than 5 out of 10.
India’s national laws require publication of key financial information on their subsidiaries, which is one reason for the higher ranking of Indian companies, the reported noted.
Scores were based on “anti-corruption measures, transparency in reporting, and how the companies structure themselves and the amount of financial information they provide for each country they operate in”.
Another finding was that publicly-listed companies scored higher than state-owned and privately-held companies “illustrating the positive impact on transparency of the disclosure requirements imposed on publicly-traded companies”.
Among TI's recommendations was a message to institutional and private investors to “demand reporting on anti-corruption programmes, organisational transparency and country-by-country reporting and factor this information into their investment decisions”.
“As emerging market companies expand their influence, they should seize the opportunity to play a bigger role stopping corruption internationally,” said Transparency International chair Huguette Labelle, in a statement.