More Companies Responding to Demands for Transparency of Risk Reporting

January 14th, 2008

Unless you are involved in corporate governance, you probably aren’t aware that there is an organization called The Corporate Library, that provides reports that assess corporate governance reporting on behalf of investors and insurance companies. The Corporate Library is a repository of reports and information such as corporate policies, SEC filings, and executive compensation. This information, available for purchase, provides corporate reporting and evaluates whether a company’s documentation offers sufficient detail to prevent shareholder lawsuits and satisfy investors’ and insurers’ requirements for transparency. In addition to selling information to the financial community, the Library also provides reports to the enterprises themselves to help them benchmark their performance against other companies.

In a recent report, The Corporate Library found that some well-known companies are not reporting enough detail about their CO2 emissions and the costs involved in cleaning up those operations. Toy company Hasbro (HAS); fiber-optic maker Corning (GLW, Fortune 500); railroad company Burlington Northern Santa Fe (BNI, Fortune 500), Royal Caribbean (RCL) cruise line; and lawn and garden company Scotts (SMG) all scored below average in the report. Meanwhile most utilities and other companies that are known for emitting significant amounts of carbon dioxide have long detailed their emissions and potential costs in financial filings. Those organizations scored much better.

Companies that expect to maintain industry leadership in a market environment that demands more transparency need to invest in monitoring and reporting platforms that will help them satisfy these new investor requirements for reporting risk management data. The Corporate Library sells a product called the “Board Analyst,” that analyzes whether a company’s governing board is proactive and effective in demanding transparency from executives. If I were a corporate board member in these times, I’d be asking my company’s executives to invest in integrated monitoring platforms that can efficiently collect and report this data to improve their transparency rating.

Entry Filed under: Operational Risk Management, Sustainability, Corporate Governance, EHS/HSE Technology