The 10 least secretive emerging market multinationals

Transparency in financial reporting is a key component of robust and accountable governance, especially in emerging markets where multinational companies may be battling not only higher risks but also slowing economic growth.

A 2016 assessment by watchdog group Transparency International suggests that of the 100 largest emerging market multinationals, Indian businesses tend to disclose the most about their anti-corruption programmes, operational holdings, and country-by-country financial results.

Nine of the ten most transparent emerging market multinationals are based in India, where regulations require companies to report key financial information on subsidiaries worldwide. Six companies of the Tata Group, a Mumbai-based holding company, ranked among the top ten. Bharti Airtel, a New Delhi-based telecommunications services company, came in first. Petronas, a Malaysian oil, gas, and energy company, was the only non-Indian company in the top ten.

Multinationals in China, where state-owned and private companies have less stringent disclosure requirements than publicly listed businesses, were the most secretive. The only Chinese multinational to score in the top 25 was publicly listed tech company ZTE.

The average score of the emerging market multinationals was 3.4 out of 10, down from an average 3.6 out of 10 three years earlier and slightly lower than the average 3.8 out of 10 that the 124 largest multinationals worldwide scored in a 2014 Transparency International assessment. But emerging market multinationals tend to disclose more country-by-country information than multinationals worldwide: 9% include the data in their reports (the same as 2013), compared to 6% of the largest companies worldwide in 2014.

Research has established a firm link between transparency in financial reporting, risk, and cost of capital, said Niamh Brennan, a management professor at Ireland’s University College Dublin School of Business.

“The more companies disclose in their financial reports, the lower will be their cost of capital,” said Brennan, whose research focuses on financial reporting and corporate governance. “If a company is very secretive, it tends to be more risky.”

The disclosures Transparency International focused on in its assessments address corruption and tax evasion, hot-button issues that are top on regulators’ minds, she said. Transparency in those areas is probably a good proxy for other disclosures in financial reports, and good reporting practices tend to promote good corporate behaviour.

6 ways to make corporate reporting more transparent

To improve transparency in corporate reporting, Transparency International suggests multinationals from emerging markets do the following:

  • Set up an informative and unrestricted corporate website as a standard communication tool. The website should be available in at least one international language.
  • Develop best-practice anti-corruption programmes, which can act as positive differentiators and provide a competitive advantage in vying for business, particularly during slow economic periods.
  • Prohibit facilitation payments, which are part of a cycle of bribery that corrodes public and business standards and poses legal and reputational risks.
  • Ensure that agents and other intermediaries are contractually bound to comply with the company’s anti-bribery programmes.
  • Publish lists of subsidiaries, affiliates, joint ventures, and other entities related to the company. The lists should include information such as each company name, the percentage owned by the group, the place of incorporation, and basic information on company operations. Make the lists easily accessible on corporate websites.
  • Publish financial accounts for each country of operation.

10 most transparent emerging market multinationals

Indian businesses dominate the ten most transparent multinationals in emerging markets, according to Transparency International:

  1. Bharti Airtel, publicly listed Indian telecom
  2. Tata Communications, publicly listed Indian telecom
  3. Mahindra & Mahindra, publicly listed Indian consumer goods company
  4. Tata Consultancy Services, publicly listed Indian tech company
  5. Tata Global Beverages, publicly listed Indian consumer goods company
  6. Tata Motors, publicly listed Indian consumer goods company
  7. Tata Steel, publicly listed Indian basic materials company
  8. Wipro, publicly listed Indian tech company
  9. Petronas, state-owned Malaysian oil, gas, and energy company
  10. Tata Chemicals, publicly listed Indian basic materials company

Sabine Vollmer ( is a CGMA Magazine senior editor.