Financial Times

The rankings of top companies done by a magazine to my mind are not a proper reflection of good corporate performance. Some of the companies on the rankings do not fit to be recognized as the best of the best as made out to be. As a Chartered Accountant I would like to highlight the followings weaknesses in the rankings and suggest that in the future that such rankings done on commercial terms are approved by the Institute of Chartered Accountants before it is allowed to be published to ensure investors are not misled.

Very serious fundamental errors are evident:
• A reputable audit firm has not audited the rankings/points. This is a basic principle observed by any publisher of a ranking.
• The selection has no transparency at all. Where are the weights? I believe there is room for fixing by the organiser.
• The selection is done by two people. We would generally expect competent and well-known people of around three to five to sit in a panel to do the selection.
The criteria used are not a proper reflection of good business performance.
•The criteria are changed from year to year. Not a level playing field. Also how can market analysts track the progression of a company?
•The credibility of the data used is suspect. The data used are audited by whom?
•The difference in points between the companies is negligible. That shows that the weights used are not reflective of the criteria generally used by top magazines like Fortune.
• The reasons given for each company’s inclusion are not grounded on proper business analysis.
• I would also expect criteria like CSR, good employer and good governance to be included.

It would be good to involve people like Asita Talwatte, Deva Cooray, Selvam Mather and G.C.B Wijesinghe to offer advice on how to do a proper ranking. The rankings to my mind are misleading and poorly done.
Nihal Fernando
Chartered Accountant
Colombo 2