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Top UK companies need to be more transparent in their political engagement

Largest FTSE companies on average score low in new index

7th December 2015, London – Some of UK’s top companies are failing to reach a good standard of transparency over their political engagement activities, according to a new study by Transparency International UK’s Business Integrity Programme.

The “Corporate Political Engagement Index 2015” assessed the public reporting of the top 40 companies in the FTSE 100 index, covering areas such as lobbying, the revolving door and political donations. All of those companies evaluated were approached for comment and input during the research period, of which only three failed to respond.

Each company received a grade – A (highest) to F (lowest) – on the transparency of their political activities. The average grade was a D, although no companies received an F. One company achieved an A, but 16 received a D, 12 a C and nine companies ranked E.

To help companies increase their transparency and better manage the risks associated with their political engagement, TI-UK have published “Wise Counsel or Dark Arts”, a set of principles and practical guidance for companies on best practice in this area.

Peter van Veen, Director Transparency International UK’s Business Integrity Programme said:

“The political activities of businesses is an area which hasn’t previously come under enough public scrutiny. We want to start that conversation and ensure there are high standards of transparency when businesses interact with politics. Political engagement is a vital part of democracy, but only if it is done responsibly and transparently.”

“The Index shows that the top FTSE companies still have some way to go in their reporting on their political engagement. The majority of the companies surveyed have extensive contact with regulators, politicians and other policy-makers and there is little excuse for not making this information available publicly.”

“All companies wish to build a strong relationship with stakeholders and high standards of transparency is a vital aspect of achieving that. Companies should not hide what they lobby on or whom they lobby, whether it is directly or through a 3rd party. Nor should they donate to political parties without declaring this openly.”

Key findings:

  • The average score in the index was 45 per cent (Band D).
  • Only one company achieved Band A.
  • Board oversight is weak, with only ten out of 40 companies reporting formal oversight by the board or a board committee.
  • Only three companies consult regularly with stakeholders about their political engagement.
  • The lowest scores were for the revolving door, for which the average score was 7 per cent (Band F).

The research highlights that:

  • Greater transparency can be achieved simply by reporting information held internally – in many areas, companies have appropriate policies but currently don’t publish them.
  • Companies should take a total view of their political engagement activities, providing board oversight, designing consistent principles, policies and procedures, and assigning responsibility for implementation to a senior manager.
  • Companies should consult with stakeholders on their policies, procedures and any activities related to political engagement and report to stakeholders through a dedicated web page or online report.

 

***ENDS***

 

Notes:

 

Contact:

Dominic Kavakeb

Communications Manager

Dominic.kavakeb@transparency.org.uk

020 3096 7696

07964 560 340 (out of hours)

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Read 303 times Last modified on Monday, 7 December 2015 21:13

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