Business leaders that want to know more about who they’re doing business with are backing a new tool for tracking corporate ownership launched one year after the Panama Papers showed how anonymity can help hide wealth and avoid taxes.
The OpenOwnership database, now available in beta form, collects and publishes in one place data on who owns and controls nearly 2 million mostly private companies in the U.K. and 25 other countries.
More transparency around corporate ownership could help businesses spot and manage risks in their supply chains. It could also help banks and other industries comply with anti-money-laundering and anti-corruption regimes.
“Trust in business and government has been eroded by corruption and rising inequality,” Unilever Chief Executive Officer Paul Polman, Allianz CEO Oliver Bäte and other business leaders who are members of a nonprofit initiative called the B Team said in a statement April 3. “Knowing who owns or controls companies and having public access to this information in open data is a critical step in rebuilding that trust and restoring pride in company ownership.”
Support for ownership transparency has also come from financial institutions, such as HSBC, and institutional investors, including Hermes Equity Ownership Services, Trillium Asset Management and others who collectively manage close to $750 billion in assets.
“This is not a case of transparency for the sake of it,” May Miller-Dawkins, the B Team’s director of governance and transparency, told Bloomberg BNA. “This is very much information that people need to make markets work better.”
As part of OpenOwnership’s beta test, a handful of small and medium-sized companies have voluntarily submitted information on their beneficial owner—the person who ultimately owns, controls or benefits from a company. The B Team plans to target more and bigger companies, including those in the U.S., for participation going forward.
“We see the OpenOwnership register as a really important tool for mobilizing business behind this issue and for proving to governments the need for this information,” the project’s coordinator Zosia Sztykowski told Bloomberg BNA.
The U.K. became the first country to introduce a public register of beneficial ownership in 2016. Other countries such as Kenya and Nigeria that have committed to creating public registers but “don’t yet have the infrastructure in place” could use OpenOwnership’s technology to underpin their work, said Maggie Murphy, senior global advocacy manager at Transparency International, one of the other groups behind the project.
The U.S. is one of the easiest places in the world to set up a company without disclosing who the owners are, making it a preferred destination for moving or hiding dirty money. Most states require beneficial ownership disclosure but several still allow anonymity. Bipartisan legislation expected to be reintroduced in Congress soon would make all companies provide such disclosure. Among the bill’s backers is The Clearing House, an association owned by JPMorgan Chase & Co., Citigroup Inc. and other banks.
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