This year, the Best Annual Report and Transparency Award (BARTA) will be awarded for the fourth consecutive year to the companies embodying the principles of transparency and accountability that BARTA was built upon. This year’s BARTA will take place in December, and businesses are expected to actively participate in the competition. The deadline for companies to submit applications is October 31, 2022.
The Best Annual Report and Transparency Award (BARTA), was created in 2019, following the enactment of the Law of Georgia on Accounting, Reporting, and Auditing in 2016. The Best Annual Report and Transparency Award (BARTA) intends to encourage compliance with new reporting regulations, foster healthy competition between companies, and improve the overall standard of corporate reporting as part of the country’s quest to build up investor trust and confidence at local and international levels.
According to BARTA’s official website, this year, the competition “is open to all companies that are public interest entities, including companies in the A and B listing categories, banks, insurance companies, etc”. The exchange-listed companies can participate in the evaluation, too, if they satisfy the eligibility criteria, while other companies classified as PIEs, including commercial firms, will need to apply.
To talk more about the Best Annual Report and Transparency Award, its specifics, the history of Georgian operation, and its future, Forbes Georgia’s Editor-in-Chief, Giorgi Isakadze sat down to talk to the Member at RSG Board Advisory Group and Director at the European Federation of Accountants and Auditors for SMEs, Paul Thompson. What follows is a transcript of their conversation.
Paul, thank you for your time, prompt reply, and everything you are doing, especially for the reform and BARTA. I want to share with our readers and followers where, when, and how the idea of BARTA originated. We talked a lot about BARTA, but we have never publicly discussed where and how this idea began. So go ahead, please. The floor is yours.
BARTA was founded in 2019 within the European Union and World Bank joint projects on financial inclusion and accountability. Our vision back then was to try to motivate Georgian companies to be more transparent, to talk more about what they have been doing, and to improve the quality of what they were disclosing in their annual reports. Thus, we created BARTA - Best Annual Report Transparency Award three years ago. What we were most interested in, though, was not the financial part of the annual report, which all your readers will be familiar with, including the financial statements, the profit and loss account, the balance sheet, the notes, etc. We were more interested to see the non-financial information disclosed, particularly, what we refer to as ESG reporting. Environmental, social and governance reporting and which, more recently, has been coined as sustainability reporting. So this was the information that we were most interested in looking at, examining, and giving kudos to those companies that were showing high-quality reporting of sustainability reporting.
You mentioned several stakeholders, including the EU, World Bank, yourself, and many locals, including the Georgian authorities and private parties. Talk to me about the idea of BARTA. Is it truly a Georgian idea? Is it a product of Georgian origin, or was it copy-pasted from somewhere else, from a project with the same purposes you mentioned in the beginning?
What we did with BARTA, is we looked around the rest of the world to see what we thought was was best global practice and created BARTA around them. I would like to think about BARTA as a fusion of the best aspects of similar global initiatives; thus, BARTA is not a cut-and-paste. If anything, I would like to think that BARTA is pretty much ahead of the game. It is a very much cutting-edge reporting initiative.
Let’s talk about BARTA’s future. Correct me if I’m wrong, but we are doing it for the fourth time now, it is BARTA’s fourth season this year. It might be already thought through to see this format distributed worldwide. Are there talks or debates with your stakeholders and partners?
Well, ever since it was first introduced, we've sought to continually improve the initiative to reflect emerging best practices. What we see around the world today is the rapid emergence of sustainability reporting. In the European Union, for example, sustainability reporting, in the coming few years, will be widespread because regulation will require it of 50,000 large and listed companies and that sustainability reporting will assume equal prominence to financial reporting, as is the case in many parts of the world.
What we wanted to do with BARTA is to be visionary and forward-thinking and to build sustainability reporting into our model - that effectively is what we're doing. In terms of what we do we automatically score all Georgian companies admitted to trading. We also encourage self-nominations - other companies that are not admitted to trading but want to participate and put forward their annual report for examination.
Paul, the list of participants is growing. The enthusiasm is growing in Georgia as well and we can see it. Yet, at the same time, I'm more than sure that from the very beginning, you and your partners answered the question: “Why BARTA?”. Can we send the same message to the local entrepreneurs today? Why should they participate in BARTA 2022?
For a simple reason: the investing public in Georgia deserves to see much more information in detail about the activities of your business than traditionally. The investing public in Georgia deserves to see, read, and understand how your business is impacting the local environment, how your business is impacting local society, and how well-governed your business is. These are the things that we are evaluating as a part of the BARTA award. In effect, we’re incentivizing those that are leading the way, that are providing the best disclosure, by awarding them or, at least, giving them some notoriety for having a self-nominated, putting themselves forward for evaluation. So we do feel that it's something that the local business community, the investors in Georgia, and further afield would like to see more of to get a much deeper, better understanding of the businesses from which they're investing their money or working for or buying products.
The only thing I can add to your answer is my appreciation and gratitude to you and your team on behalf of Forbes Georgia’s collective for BARTA and the reform held in Georgia. Let me tell you why. Without this reform, Forbes would have never published audit-based rankings in Georgia. This audit reform truly was a fantastic basis for us to develop Forbes Georgia as well, as it has developed in other countries.
That's fantastic to hear. We, the team, the jury, and everybody involved in this project, have designs on trying to improve the Georgian economy and society. This is just one small way in which we can help improve things in Georgia. You know, Giorgi, I have never been to Georgia until 2019. Since then, I got to visit the country on several occasions, got attached to the place, and found that there is rich same of talent, in particular young talent, which I think will make Georgia a great country in the future.
Thank you for your time, input, participation, and everything you do. I hope to see you after these terrible three years back in Georgia.
