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May 18, 2017

Global 100 companies outshined by their European counterparts

The Global 100 edition of the Webranking by Comprend research, based on requirements of stakeholders, jobseekers and digital audiences, reveals top companies are struggling to communicate with their stakeholders. Reaching an average score of 38/100 the world’s largest global companies, by market cap, fall three points behind the EU500’s 41.9 score average. Whilst it is important to note that global companies adhere to different accounting and disclosure rules than their European counterparts, it remains important for them to be transparent on issues that stakeholders deem important.

German telecoms company Deutsche Telekom takes first place in the ranking with 69.2 points, followed by German life sciences company Bayer with 68.6 points. Swiss nutrition, health and wellness company Nestlé rounds up the podium in third place with 62 points.

Few global companies pass the communications “stress test”

Webranking works as a stress test. Based on stakeholder demands, it measures the fundamentals of online corporate and financial communications and dialogue of the largest listed companies.. The objective of the research is to promote a digital culture within companies and help them understand how to meet the growing expectations of stakeholders.

As the criteria is based upon the needs and expectations of stakeholders – through annual surveys to investors, journalists and jobseekers – a score of 50 points out of 100 is considered the threshold at which companies respond adequately to capital demands.

Twelve companies pass the stress test, 11 are European companies with one American company making the cut by 0.8 points (the pharmaceutical company Johnson & Johnson with 50.8 points). The majority find themselves in the ‘Held back’ category (70 companies). Eighteen companies fail the stress test altogether, composed almost entirely of Chinese-owned companies.


Future vision lacking amongst global companies

Understanding the company’s future vision is important to investors. Investors and analysts are increasingly looking beyond the annual report for useful information in understanding the investment story of a company: strategy, targets, risk management and debt feature highly in their list of expectations. In fact, 95% of the respondents to our Capital Market Survey said they would like companies to present their company strategy on their corporate website.

Whilst 49% of global companies provide a generic outline of their strategy, they struggle to dig deeper and provide the substance investors are after. In fact, of these 49%, only 14% illustrate what concrete actions they will take to deliver on their strategy.

Transparency on who is running the company, less so on how much they make

Global companies are transparent when it comes to highlighting who is running their companies (85% present CVs of their group management, 81% for their board of directors), yet are less inclined to communicate how much their bosses are earning (only 16% currently have a remuneration policy on their website). This shows that most companies do not explain how they compensate their leadership team, leaving investors in the dark about whether they are being rewarded even if running afoul of their goals. A policy ensures that the company has a process in place that bases itself on long-term thinking as opposed to short-term decision-making. Communicating this openly means shareholders and investors are fully aware of the checks and balances in place to limit repercussions and potential public outcry.

Significant number reporting on sustainability, yet few presenting key issues

68% of global companies publish a CSR report. Reporting on sustainability is a sign that companies have a clear structure in place and are prepared to confront and report on their impacts globally in a responsible way. The CSR report serves as the “proof of the strategy” and outlines what companies are doing to put their strategy into motion.

Despite this high number, of this 68%, only 24% present a materiality analysis, a process of defining what is important for each company and its stakeholders. This introspective exercise allows companies to focus on what really matters. By investing time and energy into developing strategies on issues that have a larger global impact, companies are doing their bit to solve tomorrow’s problems. With an increasingly conscious consumer, the global companies that are engaging in this exercise have the ability to win more hearts and minds.

Bright spots emerge

Amongst the top 100 global companies, bright spots emerge.

Multinational technology company Apple is leaps and bounds ahead of other companies when it comes to communicating on diversity. Not only does it present figures for its own diverse workforce, it also details how it is steadily attracting more and more under-represented talent (showing clearly how many female and under-represented minorities it has hired in the last twelve months).

Swiss pharmaceutical company Roche is one to watch for effective employer branding. The company presents a well-stocked careers page, which not only covers employment opportunities but also details employee rewards, career development and the company’s view on balancing work and life.

It is positive to see some companies are taking a stance on important issues such as diversity and fair recruitment. Global companies, however, still have a long way to go to reach stakeholder needs. As the public continues to demand more and more transparency from the corporate world, these global companies will need to up their game, and do so fast.

Full Global result list here

For further information regarding the research and to order a full company report, please contact helena.wennergren@comprend.com.