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The Business Case for Transparency

Argumentos a favor de la transparencia

Annabel Lee Hogg|

The calls from business for government action on transparency in company ownership are becoming louder.

In April, a group of companies working under the B20 workstream on responsible business conduct and anti-corruption, issued its final policy paper, which made the case for rapid government adoption of corporate ownership transparency standards.

The companies, including multinational firms like Siemens, Deloitte and Unilever, recommended governments continue to lead on beneficial ownership transparency (BOT) by implementing their ownership transparency action plans, and exploring ways to raise global data quality standards, connect ownership information and monitor progress on implementation.

They also urged G20 members to develop clear rules related to access to information, and to ensure increased access to end-users.  Finally, these leading companies called on the G20 to facilitate timely and effective exchanges of information at the national and international level by adopting data standards and providing legal guidance for BOT registry set-up.

It’s our hope that these recommendations send a clear signal to governments that business leaders want to put an end to anonymous companies.  They know such companies pose material risks to their business operations, and damage the communities and nations in which they operate. Anonymous companies are vehicles for an array of corrupt practices, including money laundering, bribery, sanction avoidance, and tax evasion.  They are used to finance terrorism, as well as regimes which violate the rights and well-being of their citizens.

Beneficial ownership is a major plank of the Open Government Partnership’s effort to secure concrete commitments from governments to promote transparency and fight corruption.  These national action plans show that pressure from citizens and businesses alike is having the desired effect: more and more governments are pledging to make the reforms required to hinder corruption.

The B Team continues to work with the B20, Deloitte, Bank of Montreal, and Thomson Reuters to better understand how business can utilize data on who owns and controls companies. We’ve engaged with more than 250 companies from every sector of the economy, including luxury goods, consumer goods, construction, mining, financial services, media and publishing, legal, professional services, tech, agriculture, and tourism, resulting in a clear business case for improved beneficial ownership data.

Many business leaders understand that anonymity and lack of information prevents markets from working as they should. Societies which fail to pursue the anonymous companies responsible for fraud, crime and corruption will erode the trust required to create thriving competitive business markets.

On the issue of anonymous companies, the private sector is starting to accept the business case and take action.  In 2016, Paul Polman of Unilever and Guilherme Leal of Natura Cosmetics released information on their legal structures in open data in the lead up the UK Anti-Corruption Summit, sending a clear signal to governments that business wanted action on this important issue. The B Team, Deloitte, and Thomson Reuters also recently launched – a platform highlighting six actions that companies and investors can take to become more transparent, which has already secured 60 commitments.

Business has also been at the forefront of building the global infrastructure required to make  beneficial ownership information accessible and useful. Business has been an integral contributor to the development of OpenOwnership the world’s first public open database of company ownership information, an effort which B Team leaders strongly support.  An advisory group, including companies from the pharmaceutical, telecommunications, banking, investment, legal, and insurance sectors is providing feedback, which will help to ensure that the database is useful for business.

At the end of the day, we cannot truly address the problem of anonymous companies across markets without government leadership.

We have a long way to go before transparency of who owns and controls companies is a global norm. Business is ready to work alongside the nations in the Open Government Partnership, to end the scourge of anonymous companies and promote the open and transparent markets that are the foundation of fair and thriving societies around the world.

Open Government Partnership