Transparency International Ukraine has conducted a study ‘Transparency of Corporate Reporting’, which focused on evaluating the level of transparency in Ukrainian companies and implementing anti-corruption measures.
In the course of the study, websites and legal documents of fifty private companies and holdings from Forbes 2015 ‘The Largest Companies of Ukraine’ rating, as well as fifty public companies from the list published by the Ministry of Economic Development and Trade of Ukraine were examined. Authors have analyzed information about transparency of Ukrainian enterprises, their codes of ethics and anti-corruption programs. A form was developed to evaluate transparency, with each of twenty-seven questions weighing 0 or 0.5 or 1 point. Respondents achieved results that ranged from zero (the lowest grade that indicates lack of information) to ten points (the best possible result).
THE MOST TRANSPARENT COMPANIES
According to the results of the study, only 38% of Ukraine’s private and public companies adhere to principles of transparency and accountability. They got more than five out of ten possible points in the corporate reporting transparency rating. Almost 62% of them are far from being transparent: they received less than 5 points. On average, companies got three points for transparency. The National Nuclear Energy Generating Company of Ukraine ‘Energoatom’ and Ukrtelecom JSC got 8.9 points out of ten, achieving the best results. ArcelorMittal Kryvyi Rih JSC, ‘Mykolaivoblenergo’ JSC, Philip Morris Ukraine, ‘Ukrhydroenerho’ JSC, ‘Khmelnytskoblenergo’ JSC, state enterprise ‘Ukrspyrt’, Syngenta Ukraine, ‘Ternopiloblenergo’ JSC, Ferrexpo, First Ukrainian International Bank and State JSC ‘Naftogaz’ were also recognized relatively transparent. These companies received more than seven points. However, one third of companies did not manage to get any points for transparency. According to the study, forty Ukrainian companies published acceptable anti-corruption programs on their sites. The most successful of them are ArcelorMittal Kryvyi Rih and DTEK; their anti-corruption programs won 93% points. PepsiCo Ukraine, BaDM LLC, Philip Morris Ukraine, ‘Energoatom’, Ukrtelecom JSC, ‘Khmelnytskoblenergo’ JSC and Syngenta have programs that gained more than 70% points.
One of the authors of the study and TI Ukraine analyst Dmytro Yakymchuk noted, ‘According to the study, sixty-two companies received less than 5 points, while 30 companies got none. It indicates a very low desire of business to voluntarily participate in anti-corruption measures or to disclose transparent corporate reports. Introduction of codes of ethics or anti-corruption program is problematic, as well. For instance, 57 companies do not publish these programs on their sites or entirely lack them. Only 21 companies make effort to implement at least half of the principles, that we evaluate. However, we only checked information, that is available online, so high marks do not guarantee transparency and absence of corruption.’ He also stressed, that even those companies that have such programs often treat them just as a formality. Anti-corruption standards are implemented most efficiently, when the head of the company or another influential person is in charge of promoting them. ‘In general, position of anti-corruption representative or “compliance officer” has to have the same level of importance as those of executives, but we have not seen it anywhere. Today, we are waiting for a “Standard Anti-Corruption Program of a Legal Entity” prepared by National Agency for Prevention of Corruption to be approved. We hope that this document will accelerate the process of anti-corruption programs and policies implementation in Ukrainian business,’ said the co-author of the study and the head of the American Chamber of Commerce Compliance Club Yurii Voitsytskyi. He believes that an ISO certificate can be a good incentive for business. As a conclusion, it should be noted that the existence of serious corruption problems hinders economic growth, weakens fair competition and disrupts allocation of resources. That is why TI Ukraine calls on businesses to join the global trend: increase transparency and enforce anti-corruption standards within the company. Today, accountability to the society is a sign of professionalism and indicates a high level of business’ reputation.