How useful is the ‘Transparency in Corporate Reporting’ ranking for development debates?


Transparency International just published ‘Transparency in Corporate Reporting: Assessing the World’s Largest Companies’. Some of us probably remember the discussion around the 'Top NGO' ranking that Dave Algoso started. In some ways, I have similar problems with Transparency’s ranking based on self-reported, publicly available information by multinational companies. Any ranking suggests a hierarchy of ‘good’ companies at the top and not-so-good companies at the bottom. I am not entirely convinced that the aggregated data provide an accurate picture of some of the top performers impact on 'development' and a discussion on their ‘governance’ or 'development impact' should complement quantitative desk research in the future. Transparency is transparent about the limitations of their study, though:
Transparency International has not undertaken to verify whether information disclosed on websites or in reports is complete or correct. In other words, if a company publishes what it refers to as ‘a full list of its fully consolidated material subsidiaries’, this has been accepted at face value and scored accordingly. In addition, it is beyond the scope of this research to judge levels of integrity in company practices. Rather, the report focuses on reporting on transparency and anti-corruption in corporate policies and procedures, which Transparency International believes are crucial elements to ensuring good corporate governance and mitigating the risk of corruption. (p.47)
I just want to highlight four points that I think deserve more attention for future projects and rankings: First, the ranking treats companies as homogenous entities, even though they operate in many different countries, have many subsidiaries and thousands of employees. Corporate statements or aggregated data then become very abstract: ‘We at [insert company] take corruption very seriously’. But this can also be a rather convenient mask to hide behind and perpetuate a corporate discourse of potentially ‘a few bad apples’ that spoil the excellent work of the company, but this is not the time and space to question business models...Second, the report does not add any qualitative data to the debate. There are no case studies or concrete examples of how companies fight corruption or aim at more transparency. The reader relies entirely on public information. I did a quick check of Statoil’s website and quickly stumbled across a rather general statement:
We promote transparency and fight corruption through regular stakeholder dialogue and by respecting national and international laws. We maintain integrity through due diligence procedures, rigorous training in business ethics and anti-corruption measures. We publish our revenues, investments and taxes paid in the countries where we operate.
Third, Transparency also shies away from any ‘political’ statement regarding transparency or the underlining economic, political and jurisdictional factors that often enable perfectly legal practices/loopholes that are detrimental to host countries and/or countries of operation. The report does mention the tax exemptions for mining companies in Mozambique, but that as far as the report goes.
Which brings me to my last point: Transparency did not seem to have teamed up with other critical NGOs to give the ranking a critical review. Critical comments will probably emerge, but it would have been interesting to supplement official corporate discourses with critical comments from NGOs that often know particular industries, companies or problematic partnerships well.

From a ‘development perspective’ I have my doubts about some of the high-ranked companies and it would be interesting to have a broader debate of how rankings such as this can be enhanced by qualitative information and critical input that goes beyond official documents and statements. The report is an interesting starting point, but should be supplemented with field research and interviews in the next round – ideally with support of local and international watchdog NGOs.

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