ASSESSING 30 LISTED BELGIAN COMPANIES 2015 1
Responsible publisher: Transparency Internatjonal Belgium VZW - ASBL, Nijverheidsstraat 10 rue de l‘Industrie, 1000 Brussels, Belgium. Date of publicatjon: 18 December 2015, www.transparencybelgium.be Transparency Internatjonal is the global civil society organizatjon leading the fjght against corruptjon. Through more than 100 chapters worldwide and an internatjonal secretariat in Berlin, Transparency Internatjonal raises awareness of the damaging efgects of corrup- tjon and works with partners in government, business and civil society to develop and im- plement efgectjve measures to tackle it. Every efgort has been made to verify the accuracy of the informatjon contained in this re- port. All informatjon was believed to be correct at the date of our review (1 - 15 October 2015). Nevertheless, Transparency Internatjonal cannot accept responsibility for the con- sequences of its use for other purposes or in other contexts. We would like to thank all individuals who contributed to the research, the review or the drafuing of the report: Karel Boone, Michael Clarke, Evert - Jan Lammers, Mathieu Maes, Anja Siebel and David Szafran (for Transparency Internatjonal Belgium) and Sophie Delcoigne, Sarah Deom, Aloïs Moreau, Martjn Tombal, Léopold Van Oost and Rafaël Vansteenberghe (for Louvain School of Management). 2
CONTENTS 1. RESULTS AT A GLANCE 2. INTRODUCTION 3. SUMMARY 4. RECOMMENDATIONS 5. PROJECT RATIONALE AND METHODOLOGY 6. REPORTING ON ANTI - CORRUPTION PROGRAMMES 7. ORGANISATIONAL TRANSPARENCY 8. COUNTRY - BY - COUNTRY REPORTING 9. QUESTIONNAIRE 10. SCORES PER COMPANY 3
1. RESULTS AT A GLANCE Th This is I Index ex is is b based o ased on th the e unwei weighted ted av avera erage e of r f res esults in a lts in all ll th three cate ee categories ies ACP = = res esult fo lt for rep eporti ting on a anti ti-co corruptio tion p programmes ammes OT = r T = res esult for t for organis isat atio ional t al transparen ency cy CBC CB C = Co = Countr try-by by-countr try y reporting ting Domains BEL20 Other Average 1. Antj - corruptjon programmes (‘ACP’) 50% 24% 37% 2. Organizatjonal transparency (‘OT’) 72% 74% 73% 3. Country - by - country reportjng (‘CBC’) 11% 7% 9% 44% 35% 39% 4
2. IN 2. INTRO TRODUCTI DUCTION ON Transparency in Corporate Reportjng: Assessing 30 Listed Belgian Companies 2015 provides an evaluatjon of the transparency of reportjng by 30 Belgian listed companies: 15 of the BEL20 index and 15 smaller companies with internatjonal operatjons. The methodology used (TRAC) focuses on three areas of reportjng which are evolving very fast in the face of rapidly changing public expectatjons of what constjtutes good corporate practjce: antj - corruptjon programs, their organisatjonal transparency (where and through what subsidiar- ies they operate) and country - by - country reportjng and countries. The aim of this report is to encourage companies to align with developing reportjng require- ments rather than lag behind to await the inevitably slower developing statutory require- ments. Leading from the front can be a competjtjve advantage, partjcularly in aturactjng in- vestors and enhancing the public image. Being compliant with formal reportjng require- ments is not enough, companies increasingly need to antjcipate change. This is as true of their investor relatjons as it is of their business strategies. The voluntary reportjng that is described in this report today will be part of the formal re- portjng standards of tomorrow. Transparency Internatjonal encourages companies to adopt these standards now because it makes sense: their statements will be more convincing; their standards will be more credible; their values can be linked to policies and procedures; their vision is translated into strategy, policies and procedures. That is at the core of busi- ness case of transparency in reportjng on antj - corruptjon. All the average scores are unweighted and must be interpreted with cautjon, not least be- cause the relatjve importance of questjons varies from company to company depending on the extent of their internatjonal business and presence outside Belgium and business sec- tors. We would partjcularly like to thank the many companies which responded with useful com- ments on the initjal evaluatjons giving rise to fruitgul exchanges of views. The more we can dialog with companies in such a study the betuer and more useful the fjndings. 5
Tra rans nspar arenc ncy y : “Characteristic of governments, companies, organisations and individuals of being open in the clear disclosure of information, rules, plans, processes and actions. As a principle, public officials, civil servants, the man- agers and directors of companies and organisations, and board trustees have a duty to act visibly, predictably and understandably to promote participation and accountability and allow third parties to easily perceive what actions are being performed.” Bri riber ery : : ”The offering, promising, giving, accepting or soliciting of an ad- vantage as an inducement for an action which is illegal, unethical or a breach of trust. Inducements can take the form of gifts, loans, fees, rewards or other advantages (taxes, services, donations, favours etc.).” Cor orru ruption ion : “Corruption is the abuse of entrusted power for private gain. It hits all the people whose live, livelihoods or happiness depend on the integ- rity of those holding a position of authority.” 6
Summary 7
3. S 3. SUMMARY UMMARY Overall The following general trends and conclusions can be drawn from the TRAC - 2015 review: Firstly, companies improve their corporate reportj tjng over tj tjme. This can be seen by com- paring the scores from the companies that were also included in previous TRAC - studies. This is in line with the trend of increasing reportj tjng on non - fj fjnancial informatj tjon. Secondly the BEL20 companies do betu tuer than the smaller multj tjnatj tjonals, even though the difg fgerences are not as big as one might expect (average overall score: 44% vs 35%). Thirdly, companies pay increasing atu tuentj tjon to reportj tjng on antj tj - corruptj tjon programmes (37%) and on organizatj tjonal transparency (73%). However, country - by - country reportj tjng at corporate level does not get the atu tuentj tjon it deserves (9%). Finally, the BEL20 - companies may be twice as transparent on their antj tj - corruptj tjon poli- cies as the smaller Euronext - companies (50% versus 24%) but in this domain they are lagging behind the global average of 70% (1). The results of this TRAC review vary considerably from company to company, ofuen we be- lieve as a refmectjon of the extent to which companies have internatjonal operatjons and presences: Companies operatjng internatjonally on a large scale may be more frequently faced with issues around bribery and corruptjon, not least the legal risks associated with ex- ternal jurisdictjons such as the US Department of Justjce (DoJ) with the Foreign Corrupt Practjces Act (FCPA) and the UK’s Antj - Bribery legislatjon, now more vigorously pursued by the Serious Fraud Offjce (SFO) as was recently demonstrated by their actjon against Standard Bank for a case involving bribery in Tanzania. Companies with the bulk of their operatjons centred in Belgium, appear to be less conscious of these risks, though they stjll exist, at least as regards public disclosure of policies to combat corruptjon and bribery. Clearly too, companies with largely domestjc operatjons are less likely to be pre - occupied with disclosure around their corporate organisatjon and country - by - country reportjng. (1) Transparency in Corporate Reportjng, Transparency Internatjonal, 2014 htup://www.transparency.org/whatwedo/ publicatjon/transparency_in_corporate_reportjng_assessing_worlds_largest_companies_2014 8
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