Latest Corporate Transparency Ratings

Transparency International has recently analysed corporate transparency in the 105 largest companies in the world (here). Combined together, these companies are worth $11 trillion dollars. Canada's current GDP is approximately $1.8 trillion dollars so these companies have a combined wealth of approximately 6 times the size of the Canadian economy.

"Companies are scored from 0-10 based on their disclosure of various sorts of business information important for investors and the general public: where they pay their taxes, their corporate structures and what they are doing to prevent corruption. In the scores, 10 is most transparent, and 0 is least transparent."

Basically, the survey measures three things.

1. A company's internal rules and procedures to prevent corruption.

2. The amount of transparency in a company's organizational structure.

3. The amount of information a company publishes regarding its business activities in other countries (especially with respect to paying taxes and  royalties to government).



The top companies are:

The bottom companies are:

Two Canadian companies are on the list (both banks) and they rank in the middle of the pack. In terms of rankings within the financials industry, TD is ranked 5 th in the world and Royal Bank ranks 11 th.

It is interesting to see some big mining companies at the top of the list and some big US and Japanese companies at the bottom of the list. Ranking individual companies on transparency is interesting, but the rankings might be more dependent on the industry in which a company operates. In other words, the rankings may be more important for companies operating in highly visible industries like mining or energy. After all, does it really matter where Amazon, Berkshire Hathaway or Google rank? From a research perspective, I find that Transparency International's ranking of countries to be more informative.