The Market Monitor Minding the Nation's Business
Filipino executives have the “least commitment” for corporate ethics, according to a recent survey of the corporate culture of Association of Southeast Asian Nations (Asean) companies.
The joint study, conducted by the Asean CSR Network (ACN) and the National University of Singapore (NUS) Business School’s Centre for Governance, Institutions and Organisations (CGIO), revealed that heads of companies in Indonesia and the Philippines “have the least demonstration of support for anti-corruption measures.”
Among the 50 companies included in the survey, the top officials of 46 firms in both the Philippines and Indonesia were given “unsatisfactory” marks.
Thailand had the highest number of company leadership with commitment to anti-corruption measures at 23, followed by Malaysia at seven, and Singapore at five.
The average level of disclosure of business deals among Philippine company executives was also the lowest in the region at an average of 7 percent against a median of 18 percent in the region.
Thai executives disclose the most at 47 percent, followed by Malaysia, at 14 percent.
On the policy against political contributions, the Philippines, along with Malaysia, had the “most unsatisfactory” mark of 44, with Thailand having the most satisfactory.
The disclosure of political contributions was the highest in Thailand, at 67 percent, and least in Malaysia, at 11 percent; the Philippines was at 12 percent.
Overall, however, the level of company disclosures in the Philippines was third in the region at 43 percent, with Thailand being the most transparent at 57 percent, followed by Singapore at 47 percent.
The most transparent companies in the Philippines, based on the survey, were Ayala Corp., Banco de Oro Unibank Inc., D&L Industries Inc., DMCI Holdings Inc., Holcim Philippines Inc., International Container Terminal Services Inc., Manila Water Co. Inc., Metro Pacific Investments Corp., Security Bank Corp., Semirara Mining and Power Corp., and Travellers International Hotel Group Inc.
The survey showed that, on average, only 54 percent of the top listed companies in five Asean members have a publicly disclosed commitment to anti-corruption.
The study looked at the top 50 listed companies in each of the five countries— Indonesia, Malaysia, the Philippines, Singapore and Thailand—and assessed their level of public disclosure related to their anti-corruption efforts.
The survey’s key findings included:
• Companies scored an average of 45 percent in their overall level of disclosure across the five Asean members.
• Thailand led the overall level of disclosure, followed by Singapore, the Philippines, Malaysia, and Indonesia.
• On average, only 54 percent of the top listed companies in the five Asean members have a publicly disclosed commitment to anti-corruption.
• A total of 96 percent of companies expressed a commitment to comply with relevant laws and regulations in their country.
• Top leadership support was not as explicitly stated, with companies across the region scoring an average of 18 percent, although Thailand bucked the trend, scoring an average of 47 percent;
• On average, only 14 percent of the companies disclosed that their anti-corruption policy explicitly applies to third parties acting on behalf of the company.
• On average, 59 percent of the companies had a policy covering gifts, hospitality and expenses although the average score across the countries was 59 percent. The scores were pulled by Thailand, which had a high 84 percent compared to the others, which ranged from 39 percent in Malaysia to 63 percent in Indonesia.
• Only 19 percent of the companies disclosed that they explicitly prohibit facilitation payments.
• Only 31 percent of companies disclosed policy covering political contributions that either prohibits such contributions or requires that such contributions be publicly disclosed.
The study was implemented as part of ACN’s “Integrity Has No Borders” initiative and supported by the United Kingdom’s Foreign and Commonwealth Office Prosperity Fund.
Thirteen questions from Transparency International’s study “Transparency in Corporate Reporting” were used. The information was gathered from the companies’ websites, annual reports, sustainability reports, corporate governance reports and Code of Conduct.
“The findings are a good start for Asean companies to compare their level of disclosure in anti-corruption policies and accompanying actions and enable them to do the necessary actions to rectify any shortcomings. It will be a work in progress but companies need to start somewhere. Progress made to tackle corruption in Southeast Asia will go a long way in building a more cohesive regional economic community with the fruits of labor shared by one and all,” said Yanti Triwadiantini, chairman of ACN.