Faces of Open Government - Robin Hodess

Why is it important to talk about beneficial ownership transparency when we talk about open government?

It’s very important when we are looking to opening up government that we understand the nexus of politics and business. When we don't know who owns a business, we might not understand who is influencing politics -- or how. As a community, as civil society, working with government and business, it’s really in our interest to give businesses the chance to operate and compete with one another fairly and for governments to know that the public money they put into contracting is being allocated on merit. When you don't know who owns a company, you don't really know who wins the deal. One mechanism we can create to help us know more about company ownership is to mandate beneficial ownership transparency and public registries of beneficial ownership.

Why is BOT important to tackle corruption?

It’s been said that anonymous companies - or companies where we don't know who the ultimate beneficial owners is - are potentially runaway vehicles for corruption, tax evasion, etc. And that’s the problem: when you have secrecy around ownership, you enable opportunities for corrupt money, for illicit financial flows, to move between these secret companies across the financial markets in ways that were not possible in the past. It’s easy to set up anonymous companies - you can go online and for a few thousand dollars you are in business. The risk is that the ease of doing this, facilitated by our digital economy, puts this kind of financial vehicle at high risk of corruption and tax evasion. To tackle these ills, we need to put an end to anonymous companies.

Is it just something that civil society and governments can achieve on their own?

A lot of the work that we do in the open government space is supported and amplified when business is involved. There are some strong business cases for open government initiatives, right across the open government landscape, and these cases are essential to bring business on board.

For beneficial ownership transparency, a strong case has been made about why it is the interest of business to know who owns what companies. The case starts with business’ own interest for risk prevention and risk management, for knowing their clients. Transparency around ownership is a confidence building measure for the investor community, who seek to know more how a company is structured and who is influencing it. In addition, if businesses themselves want to be more competitive and to focus on building trust and confidence with their clients, starting with their own adoption of corporate transparency mechanisms. Understanding more about who they are competing with means that business can have a stronger ability to increase the number of companies that compete in a bid to encourage companies that they can overcome biases in a bidding systems where contracts often go to dummy companies operated by governments themselves. So there are a lot of reasons to advocate for open government and to advocate for beneficial ownership and we have been able to engage a range of companies that are involved in public contracting to hear that voice and to push that.

More about Robin Hodess

Authors: OGP Support Unit
Topics: Anti-corruption
Filed Under: Champions