6.14. Transparency and Accountability to the Public

 

Transparency

 

Some organisations do not have any programmes, polices or strategies clearly associated with anti-corruption and many of them avoid making that public.

This shows business organisations’ lack of awareness, unwillingness to discuss this issue in public and lack of understanding that corruption is a material risk to the organisation itself and that it increases  the risk of threatening consequences in case of  incident.

An organisation’s anti-corruption policy, codes of ethics, anti-corruption programme, corruption prevention procedures and recommendations must be published on the public website of the organisation and be available to all business partners as well as state institutions that the organisation has contacts  with.

Organisations should prepare reports which would specify their anti-corruption practice, measures and progress,  any cases of corruption or incidents, just as it is done according to the established practice in the field of  healthcare, safety and environmental protection.

 

Organisations should provide information received from their whistleblowers on the number of:

  • reported cases,
  • investigated cases,
  • unjustified cases,
  • cases, where appropriate action was taken,
  • cases that enabled improvement of anti-corruption measures.

 

Annual report and websites

 

The organisation should inform about the preparation, implementation, monitoring  of the anti-corruption programme or individual corruption prevention measures and the results of the programme in its Annual Report or , Sustainable Development / Social Responsibility / Progress Report as well as on  its public websites.

The requirements raised for the annual reports of big companies state that the  companies must include non-financial information issues, including anti-corruption measures[104], while the requirements applied to companies the activities whereof are  related to extraction of natural resources envisage that these companies must report on their payments to the authorities and other major financial figures in each country.

Methodologies. The Global Reporting Initiative (GRI standard) may be applied in annual reports. GRI is a widely-used standard for the provision of reports related to social and ethical issues, including corruption-related aspects.

The UN Global Compact together with Transparency International published the guidelines for companies to prepare reports related to corruption. These guidelines conform to  the GRI standard.

 

Accountability to the public

 

More and more businessmen in the world talk about corporate responsibility and higher accountability requirements for themselves. It is of major importance that businesses in Lithuania follow the best practice example and thus start to provide the largest possible amount of information about  their activities, values and finances as well as  that they not lose clients and trust of the residents of Lithuania.

According to the data of the Lithuanian Map of Corruption, businesses acknowledge that corruption hinders their activities and believe that eventually it will decrease in Lithuania. In order to reduce risks of corruption in the environment of businesses themselves, companies are recommended to make a clear statement of their position regarding intolerance to corruption and ensure the availability of the most relevant information on their websites.

 

According to the guidelines prepared by the Transparency International Secretariat and Transparency International Lithuania, business organisations operating in Lithuania are proposed to improve their accountability and publish:

  • their organisation’s integrity policy,
  • information on the  organisational structure of the organisation,
  • information on organisation’s finances.

 

It is also recommended to publish on the websites of organisations the following:

  1. Their attitude towards whistleblowers reporting potential corruption inside the organisation. Lithuania continues to be unable to ensure protection of whistleblowers who report corruption, and the citizens are often afraid to report possible violations that they notice. Therefore, it is essential for an organisation to make a clear statement on whether  its reporting channel is confidential or anonymous, also which individual employees have access to the reports and who is charged with the task to investigate the information received.
  2. The organisation’s policy for gifts  received/granted and other performance standards. Publishing of this information would be helpful in getting a better understanding on the values and principles followed by each employee of the organisation as well as the methods usually used by the organisation for cooperation with potential partners.
  3. A comprehensive  list of their ultimate owners (natural persons).
  4. A comprehensive list of their subsidiaries under direct or indirect decisive influence of their organisation. It is also recommended to announce publicly if a particular organisation has no  subsidiaries.
  5. A comprehensive list of associated companies, i.e. companies, which may be significantly influenced by other company, which is not  a subsidiary of that company, or a company operating under a joint activity (partnership) agreement. It is also recommended to announce publicly if a particular organisation has no subsidiaries and/- or associated companies.
  6. Reveal which share of the subsidiaries or associated companies belong to the organisation. It is also recommended to announce publicly if a particular organisation has  no subsidiaries and/or associated companies.
  7. Reveal the countries of incorporation and performance of the subsidiaries and associated companies. It is also recommended to announce publicly if a particular organisation has  no subsidiaries and/or associated companies.
  8. Rates of income / sales in Lithuania. In order to improve accountability for organisation’s finances to clients and other interested groups, it is recommended to publish information on income / sales by type of activity  (if there is more than one).
  9. Profit before tax and the real corporate tax amount  paid in Lithuania.

 

It is also emphasized that  the financial documents should have a search engine for each interested person  is able to easily find all the necessary information by using keywords. This is  impossible to do in the scanned documents or in appropriate pdf format documents, therefore, publishing reports in  these formats is inappropriate.

 A lot of organisations, which are confident that this improves their reputation, attracts investors and talented employees as well as raises prices for shares, submit their social responsibility reports (including anti-corruption activities) to special rating agencies, for example, included into Dow Jones Sustainability Index and FTSE 4Good.



[104] For example,  PricewaterhouseCoopers, UAB publishes its annual transparency reports on the website:

http://www.pwc.com/lt/lt/assets/document/skaidrumo-pranesimas-2015.pdf