Sri Lanka seen as moderately transparent in corporate reporting

High scoring by JKH, Commercial Bank and Dialog Axiata

By Hiran H.Senewiratne

Sri Lanka is deemed to be moderately transparent in corporate reporting and John Keells Holdings is the company with best corporate reporting scores for the second consecutive year, while Commercial Bank and Dialog Axiata secured the same positions, Transparency International Sri Lanka (TISL) said.

” TISL undertook the Transparency in Corporate Reporting Assessment (TRAC) project by using 75 Colombo Stock Exchange (CSE) listed companies, which had been selected on market capitalization, for the second time. Under this report it was found that the Sri Lankan corporate sector is moderately transparent in reporting, its Executive Director Nadishani Perera told a media conference. At the event the publication, TRAC 2021, which was compiled by TISL, was unveiled at their head office at Nawala, Rajagiriya yesterday.

Perera said that the assessment, which was conducted for the second consecutive year, scores and ranks companies on three different thematic areas crucial to fighting and preventing corruption, that is, reporting on anti- corruption programmes, transparency in company holdings and the disclosure of key financial information in domestic operations.

Perera added that the research found that companies on average are moderately transparent in corporate reporting, with a score of 6.93 out of 10, where 0 is the least transparent and 10 is fully transparent. The score obtained in the year 2020 was 6.73 by assessing 50 companies. However, John Keells Holdings was the only company to secure the full score in this assessment report, she said.

Perera said that the methodology followed was based on Transparency International Berlin requirements. The latter looks at big companies in the world when assessing transparency in corporate reporting.

Programme Manager- Private Sector Nicole Elias said that companies were scored and ranked based on publicly available information pertaining to the company. Information was derived from the latest Annual Report 2020 or 2020/21 published by companies, company websites and other publicly available company documents.

Elias said that the area of assessment is focused on anti -corruption measures, transparency in company holdings and disclosure on key financial operations. Therefore, the TRAC report does not assess the implementation of companies’ anti- corruption policies and programmes.

” Therefore, a low score does not necessarily mean that the company does not have strong anti- corruption programmes nor does it indicate any wrong doing on the part of the company and while a high score may illustrate strong disclosure systems, it may not necessarily reflect operations and implementation success, she said.

Committing to be fully transparent in the disclosure of key information is an important step that demonstrates a company’s level of accountability and social responsibility, which is why the TRAC assessment aims to ascertain, recognise, guide and encourage transparency in corporate reporting, Elias said