This week the UK government made a bold contribution to the effort to end anonymous companies by requiring public registers of company ownership in all of their British Overseas Territories by 2020. This decision is monumental as many of these territories, including the Cayman Islands, Bermuda and the British Virgin Islands, house anonymous companies that have been implicated in money laundering, tax evasion and profit shifting schemes.
Leading anti-corruption organisations have long been championing open company ownership as a response to the damage caused by illicit financial flows. More recently, strong business voices have joined them to take a stand on this issue. Private sector leaders are recognizing that it is in their interest to know who owns and controls the companies they do business with.
In 2017, eight B Team Leaders, including five CEOs, called for open data registers of beneficial ownership information in all jurisdictions. Access to company ownership information, they noted, is crucial for businesses and investors as it allows them to better manage risks, ensure integrity in their supply chains and make more informed investments.
Ending anonymous companies is also fundamental for developing economies. B Team Leader Dr. Mo Ibrahim, the former CEO of Celtel, underscored this point at last week’s annual Ibrahim Governance Weekend in Kigali, Rwanda. “We need to end illicit financial flows through anonymous companies,” he said, “It is crucial for development in Africa.”
His point is clear: transparency in company ownership will stop the tax flight and corruption that rob the public purse and reduce the domestic resource base for education, infrastructure and social services. Currently five African countries including Nigeria, South Africa, Ghana, Liberia and Kenya have made policy commitments around improving access to beneficial ownership information. And after this week’s decision, the momentum and support for a global register is becoming more of a reality.
Along with other organisations, The B Team developed a global beneficial ownership register, OpenOwnership, which currently provides ownership information on 4.6 million companies across the world. Business perspectives and input were key in developing OpenOwnership and will continue to be fundamental in its growth. For countries, investing in new tools like OpenOwnership is essential—and doable.
This is a victory to be celebrated. We can congratulate the UK on joining other leading states, like the European Union, to address this important anti-corruption measure. But it’s also a reminder of the momentum and action that’s still needed to make transparency the norm around the world.
The private sector must continue to step up on this issue. The voice of business in urging the end to anonymous is powerful and catalytic. It’s clear that proactive governments are now ready to listen. An open, fair and prosperous world is within reach—business action and advocacy can bring it even closer.
To learn more about how the private sector is leading on open company ownership and how your business can take action, read our latest report Ownership Is Everyone’s Business —Private Sector Action on Company Ownership.