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Standard & Poor’s weighs up global corporate reports

The need for timely and accurate corporate reporting is a universal concern, but there is no globally consistent evaluation of the levels of disclosure. Recognizing this gap, Standard & Poor’s has conducted a survey of 1,600 companies worldwide to complement its corporate governance scores. In this first release, over 350 liquid and large Latin American and Asian companies taken from the Standard & Poor’s/IFCI Index are analyzed

In the wake of the 1997-98 financial crisis in Asia, investors' demand for transparency of corporate disclosure has increased. In response to this, the authorities in many emerging markets are introducing regulations to enforce fuller and fairer disclosure. For example, the Novo Mercado stock exchange in Brazil has introduced guidelines on disclosure and the structure of share ownership. With these reforms, non-voting shares are prohibited and companies are required to present accounting reports in accordance with US GAAP or International Accounting Standards (IAS). A further example is in Russia, where the government approved an accounting reform programme in March 1998 with the aim of bringing the national accounting system into compliance with the requirements of the market economy and IAS.


Even in the US, where disclosure standards are generally considered to be high, regulators, investors and analysts increasingly focus on the quality and fairness of accounting disclosure. For example, the Securities&Exchange Commission recently introduced Regulation Fair Disclosure to prevent companies from selectively and unfairly sharing financial information with a few chosen analysts.


There is also an increasing body of evidence that improved disclosure has a material impact on the cost of capital. The Report of the Special Committee of the American Institute of Certified Public Accountants on Financial Reporting (1994) identified lower cost of equity to be the biggest benefit of disclosure. Academic research also supports the contention that greater disclosure reduces the cost of equity through lower transaction costs, reduced error in earnings forecasts, or higher demand for a company's securities. Other research has revealed that greater disclosure also enhances stock market liquidity.


The standard of transparency and disclosure is an integral part of the corporate governance framework and, in Standard&Poor's experience, represents one of the leading indicators of overall governance standards.


In recent years, an increasing number of countries and companies have worked hard to improve overall corporate governance, including standards of transparency and disclosure. Public companies around the world are increasingly under pressure from large institutional investors to disclose all material information.


Transparency involves the timely disclosure of adequate information about a company's operating and financial performance and its corporate governance practices. For a well-governed company, standards of timely disclosure and transparency are high. This enables shareholders, creditors and directors to monitor effectively the actions of management and the operating and financial performance of the company.


Standard and Poor's offers a number of corporate governance related services to investors, companies and other interested parties including investment banks, stock exchanges and regulators.


The flagship product is the Standard&Poor's Corporate Governance Score (with rankings from CGS-1 to CGS-10). This is a detailed analysis of a company's corporate governance standards by reference to global practices. It covers four main areas: ownership structure and influence, financial stakeholder relations, financial transparency and information disclosure, and board and management structure and process.


The Standard&Poor's Corporate Governance Score may be completed on a confidential basis, for use by the company for internal purposes (implementing improvements in standards of governance, benchmarking, etc) or for use externally, allowing companies to present their governance standards to a wider audience.


The Standard&Poor's Transparency and Disclosure Survey has been developed in response to the global financial community's need and draws on Standard&Poor's expertise in several disciplines. Its strength lies in its global dimension, objectivity, and transparency.


The benefits of the disclosure benchmark include the enhancement of investor scrutiny and a better assessment and comparison of investment risks across markets. The disclosure benchmark is designed to add a new dimension to the analyses and assessment of corporate value and the quality of reporting.


The disclosure scores are useful for equity and fixed-income investors, analysts, and brokers. For local regulators and the multilateral institutions such as the IMF, the World Bank, the OECD and the Bank for International Settlements, the disclosure scores provide a valuable monitoring tool.


The companies from Asia and Latin America covered in this first analysis do not score particularly well. No companies from the Asia region make it into the top three deciles - that is, no company includes more than 70% of the disclosure items in its latest annual report - and only a handful score more than 60%. Companies in the Latin American region fare even worse. No company scores more than 60% and only six score over 50%.


In the Asia region Taiwanese companies are by far the largest constituents of the bottom two deciles and fill 26 of the 31 slots. In fact, no Taiwanese company makes it into any of the top six deciles. The scores of companies from other countries are more evenly distributed.


In the Latin American region, of the six highest scores, three are from Brazil, two are from Chile and one is from Mexico. No one country stands out as a clear laggard, although the highest-scoring companies in Argentina and Peru only make it to the fourth decile (score a maximum of 40%).


Asia
        Sub-Categories Decile Ranking
Decile Rank Company (in alphabetical order) Country of incorporation Industry (Based on GICS*) Sub-category I** Ownership structure and investor relations (28 total attributes) Sub-category II** Financial transparency and information disclosure (35 total attributes) Sub-category III** Board and management structure and processes (35 total attributes)
10 - - - - - -
9 - - - - - -
8 - - - - - -
7 China Eastern Airlines Corp China Industrials 6 9 5
  China Petroleum & Chemical Corp (Sinopec) China Energy 4 9 6
  Infosys Technologies India Information technology 5 8 7
  Korea Telecom Korea Telecommunications 7 8 6
  Malayan Banking Malaysia Finance 7 7 6
  Sinopec Shanghai Petrochemical China Materials 6 8 6
  SSI India Information technology 6 8 6
  TelecomAsia Thailand Telecommunications 8 7 6
  UMW Holdings Malaysia Consumer cyclicals 7 7 6
6 Advanced Info Service Thailand Telecommunications 5 6 5
  AMMB Holdings Malaysia Finance 7 7 5
  Bank of Asia Thailand Finance 5 7 5
  Bank of Ayudhya Thailand Finance 6 7 6
  Beijing Datang Power Generation China Utility 5 9 4
  British American Tobacco (Malaysia) Malaysia Consumer stable 8 6 5
  BSES India Utility 5 7 6
  Charoen Pokphand Foods Thailand Consumer stable 6 7 5
  China Shipping Development China Industrials 4 8 5
  Commerce Asset-Holding Malaysia Finance 6 6 6
  Dacom Corp Korea Utility 6 7 4
  Daishin Securities Korea Finance 6 7 5
  DBS Thai Danu Bank Thailand Finance 7 7 4
  Dong-A Pharmaceutical Korea Health 5 7 5
  Dongwon Securities Korea Finance 5 7 5
  Electricity Generating Public Co Ltd Thailand Utility 6 7 7
  Grasim Industries India Industrials 6 7 4
  Hanaro Telecom Korea Telecommunications 6 7 5
  Himachal Futuristic Communications India Information technology 5 7 5
  Housing Development Finance Corp India Finance 7 6 6
  Huaneng Power International China Utility 8 8 5
  Hyundai Motor Korea Consumer cyclicals 5 7 6
  IJM Corp Malaysia Industrials 6 6 7
  Jasmine International Thailand Telecommunications 7 6 5
  LG Electronics Korea Consumer Cyclicals 5 7 6
  LG Investment & Securities Korea Finance 7 7 5
  National Finance Thailand Finance 6 6 5
  NIIT India Information Technology 5 6 6
  Petrochina China Energy 4 8 5
  PTT Exploration & Production Thailand Energy 6 7 6
  Public Bank Malaysia Finance 6 7 5
  Ranbaxy Laboratories India Health 5 8 5
  Renong Malaysia Industrials 6 7 4
  Samsung Electro-Mechanics Korea Information technology 5 7 7
  Samsung Electronics Korea Information technology 6 7 4
  Samsung Fine Chemical Korea Materials 6 7 4
  Samsung Heavy Industries Korea Industrials 5 7 6
  Samsung SDI Korea Information technology 5 7 5
  Samsung Securities Korea Finance 7 7 6
  Serome Technology Korea Information technology 5 7 5
  Shin Corporation Thailand Telecommunications 7 7 4
  Shin Satellite Thailand Telecommunications 6 7 6
  Siam Cement Thailand Materials 6 7 5
6 Siam Commercial Bank Thailand Finance 7 6 6
  Sime Darby Malaysia Industrials 6 7 5
  Sinopec Yizheng Chemical Fibre China Materials 5 9 5
  SK Telecom Korea Telecommunications 7 7 5
  SKC Korea Consumer cyclicals 6 8 5
  Telekom Malaysia Malaysia Telecommunications 7 7 6
  Telson Electronics Korea Information technology 6 7 5
  TH Group Malaysia Consumer staples 6 7 4
  Thai Military Bank Thailand Finance 7 6 6
  Time Engineering Malaysia Industrials 6 7 5
  United Engineers (Malay) Malaysia Industrials 7 7 5
  Will-Bes (The) & Co Korea Consumer cyclicals 5 7 5
  Yanzhou Coal Mining China Materials 5 7 5
5 Anam Semiconductor Korea Information technology 5 6 5
  Arab Malaysian Corp Malaysia Finance 6 7 3
  Astra International Tbk Indonesia Consumer Cyclicals 6 7 3
  Berjaya Group Malaysia Industrials 6 6 3
  BPL India Consumer cyclicals 4 6 3
  Cahya Mata Sarawak Malaysia Finance 6 6 4
  China Southern Airlines China Industrials 3 7 4
  Daum Communication Corp Korea Information technology 6 6 5
  Digital Equipment (India) India Information technology 6 6 4
  DRB-HICOM Malaysia Consumer cyclicals 6 7 3
  Engro Chemical Pakistan Pakistan Materials 4 7 3
  Genting Malaysia Consumer cyclicals 6 7 3
  Global Tele-Systems India Information technology 7 5 4
  Good Morning Securities Korea Finance 4 7 3
  Gudang Garam Indonesia Consumer stable 5 7 3
  Gujarat Ambuja Cement India Materials 5 6 4
  H&CB Korea Finance 6 7 3
  Haansoft Korea Information technology 5 6 4
  Hana Microelectronics Thailand Information technology 6 6 4
  Handysoft Corp Korea Information technology 4 7 5
  ICI Pakistan Pakistan Materials 4 7 4
  ICICI - Industrial Credit and India Finance 7 8 3
  Investment Corporation of India          
  Indofood Sukses Makmur Indonesia Consumer stable 4 7 3
  IOI Corp Malaysia Consumer stable 6 8 3
  John Keells Holdings Sri Lanka Industrials 9 5 4
  Kepco-Korea Elec Power Corp Korea Utility 5 7 4
  KGI Securities Thailand Finance 5 7 5
  Kookmin Bank Korea Finance 7 6 3
  KT Freetel Korea Telecommunications 5 7 4
  KTB Network Korea Finance 6 5 5
  Larsen & Toubro India Industrials 4 6 5
  Lippo Bank Tbk Indonesia Finance 6 6 4
  Locus Corp Korea Information technology 5 6 5
  MAA Holdings Malaysia Finance 6 6 3
  Macrogen Korea Health 6 6 5
  Magnum Corp Malaysia Consumer cyclicals 6 5 3
  Malakoff Malaysia Utility 6 7 3
  Malayan Cement Malaysia Materials 6 6 4
  Malaysian Airline System Malaysia Industrials 6 6 3
  MBF Capital Malaysia Finance 6 6 3
  Mirae Corp Korea Information technology 4 7 5
  Mplus Tech Korea Information technology 5 6 4
5 Naluri Malaysia Industrials 5 7 3
  New Straits Times Press Malaysia Consumer cyclicals 7 7 3
  Pakistan State Oil Pakistan Energy 6 6 5
  Pilecon Engineering Malaysia Industrials 6 6 3
  Pohang Iron & Steel Korea Materials 3 7 5
  Rashid Hussain Malaysia Finance 5 7 3
  Resorts World Malaysia Consumer cyclicals 6 7 3
  RHB Capital Malaysia Finance 5 7 3
  Samsung Fire & Marine Korea Finance 4 5 4
  Satyam Computer Services India Information technology 6 6 3
  Shinhan Bank Korea Finance 5 7 3
  Siam Panich Leasing Thailand Finance 5 5 5
  TA Enterprise Malaysia Finance 6 6 3
  Tata Tea India Consumer stable 6 6 3
  Technology Resources Ind Malaysia Telecommunications 6 7 3
  Tenaga Nasional Malaysia Utility 6 6 5
  Thai Petrochemical Ind Thailand Materials 5 6 4
  UCOM-United Communication Ind Thailand Information technology 6 6 4
  Videsh Sanchar Nigam India Telecommunications 3 7 4
  Vinythai Thailand Materials 6 5 4
  YTL Corp Malaysia Utility 6 6 3
4 Acer Taiwan Information technology 2 6 3
  Associated Cement India Materials 4 5 3
  Ayala Corp Philippines Finance 4 7 2
  Ayala Land Philippines Finance 2 7 1
  Bajaj Auto India Consumer discretionary 3 6 3
  BEC World Thailand Consumer discretionary 5 5 3
  Berjaya Sports Toto Malaysia Consumer discretionary 5 5 3
  Bharat Heavy Electricals India Industrials 6 5 3
  Bimantara Citra Tbk Indonesia Finance 5 7 1
  Cheil Jedang Corp Korea Consumer stable 5 6 3
  China International Marine Containers China Industrials 4 5 3
  China Southern Glass Holding China Industrials 5 5 3
  Cho Hung Bank Korea Finance 2 6 4
  Compeq Manufacturing Taiwan Information technology 2 7 3
  Cybertek Holdings Korea Information technology 4 6 3
  Dewan Salman Fibre Pakistan Materials 4 6 2
  Digital Equipment (India) India Information technology 5 5 2
  Dr Reddy's Laboratories India Health 3 6 2
  Ekran Malaysia Finance 6 4 3
  Fauji Fertilizer Pakistan Materials 5 5 2
  Formosa Chemical & Fiber Taiwan Consumer cyclicals 2 6 3
  Gamuda Malaysia Industrials 6 6 3
  Guangdong Electric Power Dev China Utility 4 6 3
  Guangshen Railway China Industrials 2 7 3
  Hanjaya Mandala Sampoerna Indonesia Consumer stable 4 6 2
  HCL Infosystems India Information technology 4 5 4
  Heilongjiang Electric Power China Utility 3 7 3
  Hindalco Industries India Materials 5 6 3
  Hindustan Lever India Consumer stable 3 6 3
  Hindustan Petroleum Corp India Energy 5 5 3
  Hong Leong Bank Malaysia Finance 6 5 3
  Hong Leong Credit Malaysia Finance 6 6 2
  Hong Leong Industries Malaysia Industrials 5 6 2
  Hub Power Pakistan Utility 5 6 2
  Hyundai Engineering & Construction Co Korea Industrials 6 4 3
4 Indah Kiat Pulp & Paper Indonesia Materials 6 5 2
  Indian Petrochemicals Corp India Materials 4 4 3
  Indonesian Satellite Corp Indonesia Telecommunications 3 7 2
  ITC India Consumer stable 3 5 4
  Korea Exchange Bank Korea Finance 3 6 2
  Krung Thai Bank Thailand Finance 4 6 3
  Leader Universal Hldgs Malaysia Industrials 6 6 3
  Mahindra & Mahindra India Consumer cyclicals 3 4 4
  Malaysian Pacific Industries Malaysia Information technology 6 4 3
  Malaysian Resources Corp Malaysia Industrials 6 6 3
  Manila Electric Co Philippines Utility 4 6 1
  Matahari Putra Prima Tbk Indonesia Consumer cyclicals 4 5 2
  Multipolar Corp Indonesia Information technology 4 6 1
  Muslim Commercial Bank Pakistan Finance 4 6 1
  Nestlé (Malaysia) Malaysia Consumer stable 6 5 3
  Pabrik Kertas Tjiwi Kimia Indonesia Materials 3 6 2
  Pakistan Telecommunications Corp Pakistan Telecommunications 5 6 1
  Pentamedia Graphics India Consumer discretionary 4 5 2
  Petronas Gas Malaysia Utility 6 5 3
  Philippine Long Distance Philippines Telecommunications 3 6 3
  Telephone Company (PLDT)          
  Ramatex Malaysia Consumer cyclicals 6 5 3
  Reliance Industries India Materials 5 6 3
  Rolta India India Information technology 3 6 3
  Semen Gresik (Persero) Indonesia Materials 4 7 2
  Shanghai Lujiazui Finance & Trade China Finance 2 7 2
  State Bank of India India Finance 3 6 2
  Sui Northern Gas Pipelines Pakistan Utility 6 5 1
  Taiwan Semiconductor Taiwan Information technology 4 6 3
  Tan Chong Motor Holdings Malaysia Consumer cyclicals 6 6 3
  Tata Iron & Steel India Materials 5 5 3
  Tekala Corp Malaysia Materials 6 4 3
  Tata Engineering & Locomotive Co India Consumer cyclicals 3 5 4
  Unisem Malaysia Information technology 6 5 3
  United Microelectronics Corp Taiwan Information technology 2 6 3
  WTK Holdings Malaysia Materials 6 6 3
  Zee Telefilms India Consumer cyclicals 3 5 2
3 Adamjee Insurance Pakistan Finance 3 5 2
  Asustek Computer Taiwan Information technology 2 5 2
  Bangkok Bank Thailand Finance 4 5 1
  Bank of Philippine Islands Philippines Finance 3 5 3
  Cathay Life Insurance Taiwan Finance 2 5 3
  China Development Industrial Bank Taiwan Finance 2 5 2
  Delta Electronic Taiwan Industrials 2 6 1
  DSQ Software India Information technology 3 4 2
  Equitable PCI Bank Philippines Finance 3 6 1
  First Commercial Bank Taiwan Finance 1 5 3
  Hynix Semicondutor Korea Information technology 2 5 2
  Inventec Taiwan Information technology 2 5 3
  Mahanagar Telephone Nigam India Telecommunication 3 5 2
  Metropolitan Bank and Trust Philippines Finance 2 6 2
  Raymond India Consumer cyclicals 2 5 3
  Reliance Capital India Finance 3 4 1
  Silverline Technologies India Information technology 2 5 1
  SK Corp Korea Energy 1 7 2
  SM Prime Holdings Philippines Finance 2 5 1
3 Sterlite Industries (India) India Materials 4 6 1
  Telekomunikasi Indonesia Indonesia Telecommunications 3 6 1
  Thai Farmers Bank Thailand Finance 3 4 1
  United Broadcasting Corp Thailand Consumer cyclicals 4 5 1
  Zhejiang Expressway China Industrials 3 6 2
2 Acer Communications & Multimedia Taiwan Information technology 2 4 1
  Advanced Semicon Engineering Taiwan Information technology 1 5 1
  Chinatrust Commercial Bank Taiwan Finance 2 4 1
  Cipla India Health 2 4 1
  CMC Magnetics Corp Taiwan Information technology 1 5 1
  Compal Electronic Taiwan Information technology 2 4 1
  Far East Textile Taiwan Consumer cyclicals 2 5 1
  First International Computer Taiwan Information technology 1 5 1
  Formosa Plastics Corp Taiwan Materials 1 5 1
  Hon Hai Precision Ind Taiwan Information technology 2 4 1
  Hyundai Securities Korea Finance 2 4 1
  Industrial Finance Corp Thai Taiwan Finance 2 5 1
  Kinpo Electronics Taiwan Information technology 2 4 1
  Mitac International Corp Taiwan Information technology 1 4 1
  Mosel Vitelic Taiwan Information technology 2 4 1
  Nan Ya Plastics Corp Taiwan Materials 2 5 1
  Orient Semiconductor Electronics Taiwan Information technology 2 4 1
  Pacific Electric Wire & Cable Taiwan Industrials 1 4 1
  RITEK Corp Taiwan Information technology 1 4 1
  San Miguel Corp Philippines Consumer stable 1 4 1
  Siliconware Corp Taiwan Industrials 1 4 1
  Systex Corp Taiwan Information technology 2 4 1
  Taiwan Cement Corp Taiwan Materials 2 5 1
  Tatung Co Taiwan Industrials 2 5 1
  TECO Electric & Machinery Taiwan Industrials 1 4 1
  Trigem Computer Korea Information technology 1 4 1
  Via Technologies Taiwan Information technology 1 4 1
  Walsin Lihwa Corp Taiwan Industrials 1 5 1
  Winbond Electronics Corp Taiwan Information technology 1 4 1
  Yageo Corp Taiwan Information technology 2 4 1
1 Samsung Corp Korea Industrials 1 2 1
 
Latin America
10 - - - - - -
9 - - - - - -
8 - - - - - -
7 - - - - - -
6 Embratel Participações Brazil Telecommunications 4 8 5
  Grupo Industrial Emprex Mexico Consumer staples 2 8 6
  Laboratorio Chile Chile Health 5 8 5
  Madeco Chile Materials 5 8 5
  Pão de Açúcar Brazil Consumer staples 6 8 4
  Tele Nordeste Celular Participações Brazil Telecommunications 6 8 5
5 Aracruz Celulose Brazil Materials 5 8 3
  Compania Nacional Telefónos de Venezuela Venezuela Telecommunications 3 7 4
  Compania Cervecerias Unidas Chile Consumer staples 6 8 2
  Companhia Vale Do Rio Doce Brazil Materials 5 8 2
  Empresa Nación Telecom Chile Telecommunications 6 7 2
  Santa Isabel Chile Consumer staples 5 7 2
  Tele Celular Sul Participaço Brazil Telecommunications 5 7 4
  Telemig-Telecom Minas Gerais Brazil Telecommunications 6 6 4
4 Acesita Brazil Materials 3 6 1
  Alfa Mexico Industrials 1 6 3
  Almendral Chile Finance 5 6 2
  Banco Itaú Brazil Finance 2 7 1
  Brasil Telecom Participações Brazil Telecommunications 2 7 2
  Cementos de México Mexico Materials 2 7 2
  Companhia Bebidas Americas Brazil Consumers staples 3 7 2
  Compania de Telecoms de Chile Chile Telecommunications 4 7 2
  Compania De Petróleos Chile Chile Industrials 4 6 2
  Compania Siderurgica Nacional Brazil Materials 2 7 2
  Grupo Financiero BBVA Bancomer Mexico Finance 2 7 2
  Grupo Financiero Banamex Mexico Finance 3 7 2
  Grupo Financiero Galicia Argentina Finance 1 8 3
  IRSA Inversiones y Representaciones Argentina Finance 2 7 4
  Minas Buenaventura Peru Materials 3 6 2
  Perez Companc Argentina Energy 3 7 1
  SACI Falabella Chile Consumer discretionary 6 6 2
  Soc Quimica y Minera de Chile Chile Materials 3 7 1
  Telecom Argentina STET-France Argentina Telecommunications 1 7 2
  Transportadora De Gas del Sur Argentina Utility 1 8 3
3 Acindar Industria Argentina Argentina Materials 3 5 1
  Banco Santiago Chile Finance 2 5 1
  Banco Bradesco Brazil Finance 3 5 2
  Brasil Telecom Brazil Telecommunications 1 6 1
  Companhia Energética de Minas Gerais - CEMIG Brazil Utility 4 5 1
  Cerveceria Backus & Johnston Peru Consumer staples 3 6 1
  Companhia Energetica de São Paulo Brazil Utility 4 5 1
  COPEL - Companhia Paranaense de Energia Brazil Utility 4 4 2
  Credicorp Peru Finance 1 7 1
  Edegel Peru Utility 3 5 1
  Eletropaulo Brazil Utility 3 4 1
  Embotelladora Andina Chile Consumer staples 3 5 2
  EMBRAER -Empresa Bras de Aeronautica Brazil Industrials 3 6 1
  Empresas Almacenes Paris Chile Consumer discretionary 1 5 1
  Empresas CMPC Chile Materials 2 5 2
  Empresa Nacional de Electricidad de Chile Chile Utility 2 6 1
  Enersis Chile Utility 2 6 1
  Gerdau Siderurgy Brazil Materials 3 6 1
  Globo Cabo Brazil Consumer discretionary 3 4 1
  Grupo México Mexico Materials 1 5 1
  Grupo Televisa Mexico Consumer discretionary 2 6 1
  Investimentos Itaú ("Itausa") Brazil Industrials 2 6 1
  Kimberly-Clark de México Mexico Materials 2 5 1
  Light Servicos Eletricidade Brazil Utility 3 5 1
  Masisa Chile Materials 2 6 1
  Minsur Peru Materials 3 5 1
  Organización Soriana Mexico Consumer discretionary 1 5 1
  Petrobrás-Petroleo Brasiliero Brazil Energy 2 6 1
  Saneamento Basico do Estado deo Paulo Brazil Utility 4 5 1
  Savia Mexico Finance 3 6 1
  Siderca SAIC Argentina Materials 3 6 1
  Siderar SAIC Argentina Materials 3 5 1
  Tele Centro Oeste Celular Brazil Telecommunications 3 5 1
  Tele Norte Leste Participações Brazil Telecommunications 4 6 1
  Telmex-Telefónos de México Mexico Telecommunications 2 5 1
  TV Azteca Mexico Consumer discretionary 1 3 3
  Usinas Siderurgicas de Minas Brazil Materials 2 5 1
  Volcan Compania Minera Peru Materials 3 5 1
  Wal Mart de México Mexico Consumer discretionary 3 5 1
2 Banco Continental Peru Finance 1 5 1
  Banco de A Edwards Chile Finance 1 3 1
  Bavaria Colombia Consumer staples 2 4 1
  BBVA Banco Francés Argentina Finance 3 3 1
  Carso Global Telecom Mexico Telecommunications 2 5 1
  Celular Crt Participações Brazil Telecommunications 2 5 1
  Cementos Lima Peru Materials 1 5 1
  Cemex Venezuela Venezuela Materials 2 3 2
  Chilquinta Energia Chile Utility 3 2 2
  Consorcio G Grupo Dina Mexico Industrials 3 4 1
  Distribución y Servicio Chile Consumer staples 1 3 1
  Electrobrás Brazil Utility 2 5 1
  Grupo Carso Mexico Industrials 2 4 1
  Grupo Modelo Mexico Consumer staples 1 4 1
  Corporación Interamericana de Entretenimiento Mexico Consumer discretionary 2 5 1
  Quinenco Chile Materials 2 5 1
1 - -   - - -
 
* Global Industry Classification Standard
** As per centage of the total sub-category

Methodology

The survey uses the latest available annual reports and assesses the level of transparency and disclosure of companies in emerging markets (Asia, Latin America and central and eastern Europe) as well as developed markets (Europe, developed Asia and US).


Transparency and disclosure is evaluated by searching company annual reports (both English and local-language versions) for the inclusion of 98 possible information items ("attributes") broadly divided into three sub-categories:


  • ownership structure and investor relations (28 attributes)

  • financial transparency and information disclosure (35 attributes);

  • board and management structure and process (35 attributes).

    Each question is scored on a binary basis representing "yes" (included) or "no" (not included) answers to ensure objectivity.

    Companies are ranked in decile order. An overall ranking reflects the total number of the 98 possible attributes included in a company's annual report and accounts. Individual rankings for each of the three sub-categories are calculated in a similar way by reference to the maximum possible number of attributes for each sub-category.

    Example questions

    Ownership structure and investor relations

    Does the annual report and accounts contain:

  • a description of the share classes?

  • a review of shareholders by type?

  • a description of the voting rights for voting and non-voting shares?

  • the number and identity of shareholders holding more than 3%?

    Financial transparency and information disclosure

    Does the annual report and accounts contain:

  • information on the company's accounting policy?

  • financial information prepared in accord with internationally recognized accounting standards (IAS or US GAAP)?

  • information on efficiency indicators (return on assets, return on equity, etc.)?

  • consolidated financial statements (if applicable)?

    Board and management structure and processes

    Does the annual report and accounts contain:

  • a list of board members?

  • a list of board committees?

  • is there an audit committee?

  • details of directors' remuneration and details of performance-related pay for directors?

    The Standard&Poor's Transparency and Disclosure Survey will eventually cover approximately 1,600 companies covering the Standard&Poor's Global 1200 index and an additional 400 companies representing the leading companies in Standard&Poor's/IFCI emerging markets index.

    The S&P Global 1200 represents leading global companies and includes the S&P500, 150 companies in Japan, and 350 companies in Europe. These 1,600 companies cover over 40 markets and represent approximately 70% of the world's tradable market capitalization.

    Contact: Amra Balic, Standard&Poor's corporate governance service, +44 20 7826 3637, or Sandeep Patel, Standard&Poor's index services, +1 212 438 3917

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