TISL launches first-ever assessment of transparency in corporate reporting

Friday, 19 June 2020 00:15 - - {{hitsCtrl.values.hits}}

JKH, Seylan Bank, Hemas, NDB and People’s Leasing & Finance achieve highest overall scores

Transparency International Sri Lanka (TISL) yesterday launched Sri Lanka’s first-ever assessment of transparency in corporate reporting amongst the top 50 listed companies on the Colombo Stock Exchange, as per market capitalisation on 28 February 2019.

The report, ‘Transparency in Corporate Reporting (TRAC): Assessing the Top 50 Listed Companies in Sri Lanka,’ ranks companies on three different thematic areas related to corporate reporting: anti-corruption programs, transparency in company holdings and the disclosure of key financial information in domestic operations.

The research found that the average Top 50 listed company in Sri Lanka is moderately transparent with a score of 6.73 out of a possible maximum of 10.

The companies which recorded the highest overall scores in the assessment are John Keells Holdings, Seylan Bank, Hemas Holdings, National Development Bank and People’s Leasing & Finance. Encouragingly, amongst the key findings of the assessment was the fact that the companies reviewed had an average score of 86% in reporting on company holdings, which is considered significantly transparent. Furthermore, 31 companies were found to be fully transparent in terms of their domestic financial reporting.

Speaking on the launch of the report, TISL’s Executive Director Asoka Obeyesekere said: “This report provides an opportunity to take stock of current disclosure practices, crediting the efforts that have already been taken and identifying areas for potential improvement.”

Information for the report was gathered from each company’s Annual Report by a team of TISL researchers. The selected companies were informed of the research being carried out and were requested to provide feedback on the preliminary findings, with publicly accessible information sources.

“A low score does not mean there has been any wrongdoing, but rather illustrates an opportunity for improvement in disclosure practices. Likewise, a high score may illustrate strong disclosure systems, but this may not reflect operational and implementation success. The report seeks to provide a basis upon which a broader discussion can commence on normalising transparency in corporate reporting,” Obeyesekere added.

This endeavour marks TISL’s first foray into assessing transparency in the private sector. TISL is hopeful that this will provide an opportunity to work with the private sector, to incrementally improve transparency in corporate reporting.

Further information on the TRAC report and can be accessed at www.tisrilanka.org/TRAC.