A United Nations Principles for Responsible Investment (UNPRI) initiative has been successful in improving anti-corruption risk management among three quarters of the companies it targeted.
The companies received special attention due to their poor track record in public disclosure of anti-corruption risk management, and high levels of corruption risk.
Twenty-one signatories managing a collective $1.7 trillion in assets were involved, including the Australian Custodians of Superannuation Investors (ACSI).
ACSI chief executive Ann Byrne said that ACSI, representing long-term investors, had a responsibility to address the impact of bribery and corruption on returns, market volatility and company performance.
The signatories engaged 21 companies across 14 countries in March 2010 to encourage appropriate anti-corruption controls in line with international reporting frameworks such as the International Corporate Governance Network's Statement and Guidance on Anti-Corruption Practices, and the UN's reporting guidelines on anti-corruption.
Company improvements in disclosing how they managed bribery and corruption risks were measured using Transparency in Reporting on Anti-Corruption (TRAC) methodology.
UNPRI found that by early this year 16 companies had improved their performance against the 50 indicators, with 10 companies improving their score four-fold and the leading company improving its score six-fold.
Improving transparency allows investors to better manage their exposure to financial, operational and reputational risks, according to UNPRI.
"Companies involved in allegations of corruption and bribery are often characterised by poor corporate governance processes, the failure of internal processes to protect the integrity of stakeholders, and an inability to successfully implement and monitor company codes of conduct," Byrne said.
