The Open Government Partnership – 55 countries which all claim to want to be more transparent, effective and accountable – recently met in Brazil. Increasing corporate accountability is one of their five ‘grand challenges’. However new research by the information provision group OpenCorporates highlight the scale of the challenge: governments are not doing very well on making even the most basic of company details available, let alone the more detailed ownership information that’s actually required to prevent corrupt politicians, terrorists and arms traffickers from moving dirty money around the world.
OpenCorporates scored each country on six criteria, including whether information on directors and shareholders is available and whether it is possible to carry out free searches online. The average score of the Open Government Partnership countries was just 21 out of 100, even though the criteria against which they were being judged were pretty basic. Several major countries, including Spain, Greece and Brazil, scored zero, meaning no company information is available at all without payment or registration.
The OpenCorporates research looked at whether information on the legal owners of companies was available. This is an important first step. But what’s really needed is for information on the beneficial owners of companies – the people who pocket any profits – to be made available, as advocated by Global Witness and others. You might think that the legal owners of a company would be the people who’d get such profits, but this isn’t necessarily the case as the legal owners may be ‘nominees’ paid to front the company for someone else, or another company rather than a real live human being. Being able to find out who is behind a company would help prevent criminals from hiding their identity in order to move dirty money around the world, and would be no extra burden to those carrying out legitimate business. This last point has been emphasized by a leader in the pro-business Economist newspaper supporting greater transparency over corporate ownership.
Disclaimer: Unless specifically stated to be the views of the Financial Transparency Coalition, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Financial Transparency Coalition.