A new report by Corruption Watch has revealed that, while South African companies are fairly transparent when it comes to certain anticorruption reporting practices when compared with their global counterparts, much could be done to improve disclosure and accountability in other areas where companies fell considerably short.

Speaking at the release of the ‘Transparency in Corporate Reporting: South Africa’ report, Corruption Watch principal researcher Liezemarie Johannes said the uneven findings of the disclosure practices of the 50 largest listed and unlisted South African companies reviewed showed that the disclosure of information and transparency for robust and accountable governance could be better.

The report, which formed part of Transparency International’s Transparency Reporting on Anti-Corruption series, measured the transparency levels of anticorruption programmes, the levels of organisational transparency and country-by-country reporting mechanisms of 36 of the top JSE-listed companies in terms of market capitalisation and 14 unlisted companies.

“Transparency is not enough to ensure ethical business practices, but it goes a long way,” she said.

Highlights of the report showed that three companies scored at least 50% in all three categories, while 12 listed companies scored less than five out of ten overall.

Twenty-seven companies failed to publicly reveal information about tax payments in foreign countries and 29 provided no information on pre-tax profits. Seventeen of the reviewed companies banned facilitation payment, but the remaining did not prohibit this practice.

Further, 25 companies did not prohibit retaliation for whistle-blowers reporting corruption, while 16 did not provide a confidential reporting channel for whistle-blowers.

The best performing listed companies emerged from the mining sector and the worst performing listed companies were found in the financial sector.

The report found that, while many of the companies sampled scored well in the reporting on anticorruption programmes, companies in the mining industry performed extraordinarily well, perhaps owing to more stringent regulations governing the sector, Johannes pointed out.

Overall, five of the ten top achievers in this category scoring well over 90% were mining companies.

The average score achieved in this category was 56%, while 20 companies scored higher than 75% and 20 scored at least 50%.

Six companies, including three mining companies, scored 100% in the reporting on anticorruption programmes. Four of the reviewed entities held a score of 96%.

The worst performing listed company scored 23%.

Unlisted companies, which were generally not required to publicly disclose information, were the worst performing in this category, with ten of the 14 reviewed unlisted companies scoring zero.

“Although public reporting by companies on their anticorruption programmes cannot be equated with actual performance, reporting does focus the attention of companies and their stakeholders on their practices and drives improvement,” Corruption Watch said in the report.

Most companies have shown an interest in improving the quality and extent of their anticorruption measures and how they report on them, Corruption Watch executive director David Lewis said.

In the organisational transparency category, companies achieved an average score of 49%, with the worst listed performer coming in at 19%.

Three companies – two listed and one unlisted – achieved 100% in the category that evaluated a company’s disclosure of subsidiaries, affiliates, joint ventures and holdings.

Six companies achieved a score of 88%, seven companies scored below 13% and 15 companies scored above 75%.

Under the country-by-country reporting, one company – again a mining company – scored 100%, with this category netting an average score of 15%.

This category assessed the level of country-by-country reporting by companies on basic financial data, which showed the extent of a company’s operations and made the company more accountable for its activities in a given country.

However, a number of companies reported region-by-region data and not specifically country-by-country and this had an impact on the overall results.

This category was also not applicable to 14 of the surveyed companies, as they did not have operations outside of South Africa.

Six companies scored above 50%, while 24 companies scored zero.

Revenue was the most disclosed country-by-country financial information; however capital expenditure, tax, pre-tax profit and community contributions were among the information that needed to be “broken down further”.

Corruption Watch believed comprehensive public reporting was a key component of the measures companies should take to address corruption.

“In spite of global and local regulatory advances, most companies continue to reveal too little about their management systems to prevent and detect corruption. For the most part, large public companies are not doing enough to foster the transparency and accountability that are needed to ward off corruption,” the report noted.

Johannes said remedial recommendations included the adoption of a clear and unambiguous stance on anticorruption, with enhancements made to programmes, the strengthening of anticorruption training programmes, the placement of measures to ensure accountability for all stakeholders, the implementation of proactive corporate transparency, enforcing the regulatory framework and the establishment of effective and safe whistle-blower programmes.

The report was based on data collected from or made available on companies’ websites between November 2015 and March this year.