Corruption disables corporate transparency in Hungary, survey says

A Transparency International (TI) study released this month shows that Hungary state-run companies often fail to meet transparency criteria established by law, much less go the extra mile and actually let citizens review their activities easily.

While some corporate leaders said they experienced no corruption, several others said the situation was the exact opposite. “This is a feudal society, not a civic one, where loyalty overrides every other virtue both in the public and the private sector,” one corporate leader told TI according to an article published by anti-corruption and investigative journalism watchdog, atlatszo.hu.

The survey concluded that the majority of Hungarian state-owned companies should be taught about the drawbacks of opacity, then led to a formal adherence to law, which would eventually give way to a genuine change of mentality, permeating corporate culture.

While state-run companies have said for a long time they strive for transparency and efficiency they have had less than adequate training and other programmes to affect real change in their corporate culture. There have been no legal recommendations, no monitoring or control systems in place. The infrastructure has proven inadequate when it was exposed to a high volume of public record requests.

To gain an international benchmark TI surveyed state-owned and exchange-traded companies in Canada, Germany, France, Britain and Belgium, as well as the Czech Republic and Poland. State post office and rail companies were often targeted, as were corporations like Michelin or BMW.

Overall efforts at transparency were greater at exchange-traded corporations than at state-owned ones but there were positive examples in the latter as well, such as the Polish railway or post office companies, which provided accessible information about their operations online, TI found.

Conversely, Hungarian state-owned companies barely met the legal minimum, and the majority were doing less than legal requirements – in other words, they were breaking the law.

Hungary’s state-owned financial and transportation companies were more transparent, while agricultural and public service companies were more likely to be in breach of legal requirements. Bigger companies laid more emphasis on transparency than smaller ones.

The most common measures were publicly available procurement rules and secrecy statements, while ethics hot lines were far less common, as were separate compliance divisions.

TI attempted to interview corporate leaders but did not get very far especially with companies where the efforts at transparency were inadequate. Those corporate leaders who did stand for an interview often said that efforts were exhausted at meeting the legal minimum even though the room for improvement was vast.

Read this article in Hungarian here, posted on 08 May 2014.
Translated by atlatszo.hu volunteers.