A new anti-corruption index examining anti-corruption measures in the defense sector reveals some good news: many defense companies are increasingly addressing corruption risks, with improvement evident in companies from every region of the world.
The index, conducted by Transparency International, measured the transparency and quality of ethics and anti-corruption programs of 163 defense companies from 47 countries. TI ranked each company from band “A” (highest) to “F” (lowest), based on the extent of public evidence on their ethics and anti-corruption program.
Of the 163 companies in this year’s index, 127 were assessed in 2012, when TI issued its last index. “The results show significant improvement overall,” TI stated. “At the upper end, 26 of the 127 companies are now in bands A and B, compared with only 10 in 2012. Furthermore, only 35 companies are in band F, compared with 46 in 2012."
The index also showed that 42 companies improved by at least one band since 2012, with 18 companies moving up to band A or B from bands C to F. The companies that improved came from all over the world, including the United States, the United Kingdom, Brazil, Finland, France, Germany, Israel, Italy, Japan, the Netherlands, Norway, South Korea, South Africa, Spain, and Turkey.
In total, 76 companies (60%) have improved, compared with 2012. Seventeen percent of companies are now in bands A and B, compared with only 8% in 2012.
According to the index, four defense companies—Bechtel, Lockheed Martin, Fluor, and Raytheon—are in band A, while 23 companies are in band B. These companies include Accenture, BAE Systems, KRB, Northrop Grumman, Hewlett-Packard, and Rolls-Royce, to name a few. Twenty-nine companies are in band C, including Boeing, Honeywell, Dyncorp International, and more.
Room for Improvement
The index also found, however, room for improvement. According to the TI index, 107 of the defense contractors in the study, which included 36 more companies than the 2012 analysis, performed in the bottom half of the index (bands D to F), showing little evidence of having in place an ethics and anti-corruption program. An additional 23% (37 companies) provided no evidence at all.
Of the 85 companies that scored in bands D to F in the 2012 index, 29 have “substantially improved” their public disclosure, TI said.
The improvement is mostly due to additional information disclosure in two specific areas: how the companies assess corruption risk, and how staff members are trained on ethics and anti-corruption measures.
In the report, TI called on senior management and boards of directors to ensure that they have a robust ethics and anti-corruption program and encourage periodic independent reviews; disclose the program fully on your company’s website; and speak up strongly against corruption both inside and outside your company.