Pakistan companies score moderately on corporate transparency: TRAC report
ISLAMABAD: Transparency International Pakistan (TIP) released its Transparency in Corporate Reporting Assessment (TRAC) report, evaluating the transparency of the top 69 publicly listed companies on the Pakistan Stock Exchange (based on market capitalisation).
The report assessed these companies across five key areas crucial to fighting and preventing corruption: reporting on anti-corruption programmes, organisational transparency, disclosure of key financial information in domestic operations, reporting on gender and non-discrimination policies, and human rights and corporate responsibility, reported Dawn.com
The overall finding was that companies in Pakistan were “moderately transparent” in corporate reporting, achieving an average score of 7.23 out of 10, where 0 represents “least transparent” and 10 signifies “fully transparent”. However, the report highlighted that no company achieved a perfect score.
The assessment revealed that the lowest average score, 47.28 percent, was observed in the category of anti-corruption programmes, indicating only partial transparency in this area. Notably, companies like Lucky Core Industries, Allied Bank Limited, and Oil and Gas Development Company Limited received the highest overall scores in the assessment, demonstrating relatively strong transparency practices. In the specific category of anti-corruption programs, Colgate-Palmolive (Pakistan) Limited, MCB Bank Limited, Allied Bank Limited, and Engro Corporation Limited achieved the highest scores.
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It is important to understand that the TRAC report focuses solely on the extent of reporting and does not evaluate the actual implementation or effectiveness of the companies’ anti-corruption policies or programs. A lower score in the report does not necessarily imply unethical behaviour or wrongdoing, and a higher score does not guarantee strict adherence to ethical standards.
Transparency International Pakistan highlighted the critical role of transparency and accountability in driving sustainable economic growth and investor confidence, especially during the current economic challenges faced by Pakistan. The report aims to encourage companies to proactively disclose information, even beyond legal requirements, as a demonstration of their commitment to ethical business practices and corporate accountability.
Kashif Ali, Executive Director of TIP, highlighted the increasing need for reforms in corporate reporting practices, especially as regulatory bodies and international financial institutions emphasise governance improvements for economic recovery. TIP hopes the assessment will encourage the private sector to lead by example, cultivating a business environment characterized by openness, accountability, and a zero-tolerance approach to corruption. The report includes detailed recommendations to help companies improve their disclosure practices, leading to better scores in future assessments.
Justice Zia Perwez, Chairman of TIP, underscored the pressing need for corporate integrity and transparency, particularly amidst the current economic challenges Pakistan is navigating.
He said it was imperative for businesses to embrace openness, accountability, and ethical leadership for economic recovery and strengthening the economy.
This report follows the recent announcement by Transparency International that Pakistan’s ranking on the Corruption Perception Index 2024 decreased by two spots, from 133 in 2023 to 135 out of 180 countries.
