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Company Information

Introduction

The company information module has been developed in partnership with Open Ownership to address two key questions:

  • Which countries have policies and practices in place for the centralised collection and publication of corporate registration and beneficial ownership information?
  • How is corporate ownership and beneficial ownership data being used?

It explores data on companies as a key connecting element of a modern public data infrastructure, supporting trade, trusted business environment, investigation, and enforcement related to anti-corruption and anti-money laundering activities.

Prospective Indicators

Company Information and the Public Good

Private firms can be engines of development, innovation, and the delivery of vital services and consumer goods. Company activities can also cause environmental and social harms, and corporate structures can be abused for money laundering, corruption. Opaque corporate structures can hide wrongdoing and harm international trade. Information on company registration, ownership, and activities can provide critical evidence for public understanding and regulation of the activities of companies, as well as support the functioning of a productive private sector that supports sustainable development outcomes.

Over recent decades, international standards have developed that require minimum levels of data collection on the registration and beneficial ownership of companies, trusts, and other legal arrangements, with civil society advocating for this information to be made publicly accessible and regional and sectoral norms of public disclosure developing as part of movement toward greater transparency (Justine Davila, Michael Barron, and Tim Law 2019). The open data movement has placed particular emphasis on company identifiers having key data links to public finance, public contacting, and political integrity (Garcia Aceves 2018).

The potential of open, shared and interoperable data on company ownership is significant. Such data can improve policy-making, support effective domestic and cross-border regulation of companies, build trusted business ecosystems that facilitate commerce and trade, support taxation policy and implementation, provide information to assist civil society oversight and action against grand corruption and money laundering, and support data-driven public procurement analysis.

Use Cases Shaping This Module

A number of organisations carry out reactive mapping of corporate register transparency (e.g., Open Corporates Open Company Data Index) and support the availability of open beneficial ownership registers (e.g. Open Ownership map and Global Witness review of EU progress). The periodic review of country policy and practice provided by the Global Data Barometer complements these initiatives by:

  • providing updated analysis and highlighting recent changes in practice (which can be fed into updates of these other products);
  • providing local insights from country-level researchers; and
  • providing additional contextual data that can support operational decision making (such as country targeting of capacity-building programmes, particularly in the emerging area of beneficial ownership transparency).

The use questions proposed for this module are designed to fill a gap in the understanding of how company information data is being put into use around the world and will provide material for future case studies by organisations working on corporate ownership transparency. The data gathered may also be useful to projects seeking to improve the interoperability of corporate identifier data, such as org-id.guide, and to civil society campaigners pushing for greater transparency of corporate ownership information.

The overall assessment provided by the Barometer will provide a robust high-level statistic on the extent to which company information data is available and used for the public good. It may also prove useful to support business registers in benchmarking their practice, complementing the International Business Registers Report regular survey of corporate registrars (Registers Working Group 2019).

Module Development Notes

Structured data on companies has a myriad of uses, from supporting economic and social policy-making to facilitating commerce and trade in trusted business ecosystems and supporting investigations into illicit financial flows.

Practices of corporate registration and transparency have developed in different ways around the globe, creating a mixed picture when it comes to the production, quality, and availability of public data on companies, their ownership, and their operations (Cobham, Janský, and Meinzer 2015). However, international norms setting out the foundations for open company registers and the collection of beneficial ownership information are increasingly established, and there is a well developed market for services that both package and complement existing public company data and fill the gaps in public data availability, demonstrating significant demand for structured data.

In the development of this module, the emerging international consensus on the collection and publication of company data has been considered, and in particular, company ownership data in order to identify the data practices it is reasonable to benchmark countries against.

In particular, we recognise company ownership transparency as an area that involves the disclosure of data on natural persons that may commonly be governed by data protection laws. The publication of limited personal information with appropriate safeguards can be legitimate and justified in relation to the wider public policy objectives of company laws. This offers an opportunity for the Barometer to test whether country level privacy frameworks and disclosure rules are equipped to support the careful balance of protecting both public and personal interests involved in company ownership data (Open Ownership, The B Team, and The Engine Room 2019).

Noting Fung and Weil’s (2010) argument that “all th[e] energy devoted to making open government comes at the expense of leaving the operations of large private sector organizations—banks, manufacturers, health providers, food producers, drug companies, and the like—opaque and secret” (106), the Barometer seeks to explore the types of disclosures that firms may be required to make through thematic regulation. However, in the 2021 pilot edition of the Barometer stops short of including distinct indicators on these additional disclosures, finding limited global normative agreement or practice to build on at present.

Standards for Disclosure

A feasibility review has been completed to identify which data fields should be included within this module. There is no internationally agreed framework that covers the creation of centralised corporate or beneficial ownership registers, and Lord finds that although some early data standardisation for beneficial ownership data has been put forward by civil society - “corporate registers still lack a universal data standard that could be used to make opening these datasets easier in the future” *(Lord 2019, 52).* However, there are clearly emerging de facto standards with respect to providing integrated national access to company information, and global normative standards with respect to the creation of centralised beneficial ownership registers. This module has explored those standards in order to identify reasonable GDB benchmarks.

Central and Federated Registers

While many countries operate corporate registration at a sub-national level, it is increasingly common to find systems that aggregate or search across sub-national registers. For example, Colombia and Germany both have comprehensive portals to access information from local registrars and Canada has a beta service covering seven of Canada’s provinces and territories. A notable exception at present is the United States, although third parties have been able to aggregate data from the majority of states. Given many user needs for data are better served when data is available in an aggregated and standardised form at the national level, The Barometer approach is to allow that countries with either national registers or national aggregation platforms score higher than those with only sub-national siloed registers.

Global Policy Standards

Global norms with respect to company registration and beneficial ownership transparency can be found in a number of places. The most universal basis (but arguably weakest when it comes to supporting centralised structured data) can be found in recommendations of the 39-member Financial Accountability Task Force (FAFT), established by the 1989 Paris G-7 Summit. FATF recommendations have received backing (predominantly through affiliated regional bodies) from over 180 jurisdictions, and include recommendation 24 (Transparency and Beneficial Ownership of Legal Persons) the interpretive notes of which state that “All companies created in a country should be registered in a company registry” and that registration should include a “company name, proof of incorporation, legal form and status, the address of the registered office, basic regulating powers (e.g., memorandum & articles of association), [and] a list of directors” and that there should be mechanisms to keep this basic information up to date (FATF/OECD 2020, 91).

FATF Best Practices on Beneficial Ownership for Legal Persons state that this information “should be made publicly available to facilitate timely access by FIs, DNFBPs and other competent authorities” (FATF/OECD 2019, para. 34). Beyond basic information, FATF recommendations require companies to maintain shareholder registers, although the FATF recommendations do not require this to be contained in the company register. For beneficial ownership information, FATF recommendation 24 allows that this information may be stored in central registers, or may alternatively be held by companies or other financial institutions (FATF/OECD 2020, 91). Furthermore, FATF recognises that publicly accessible company registers in foreign jurisdictions are a key source of information for enforcement authorities undertaking anti-money laundering investigations. In the case of beneficial ownership information, FATF's research acknowledges that it is hard to obtain for jurisdictions where it is not publicly available within the company register (FATF/OECD 2019) .

FATF recommendations do not directly address the use of structured data to record information on companies, their owners or beneficial owners, although recent best practice notes highlight the value of using technology to facilitate checking and validation of reported ownership data (FATF/OECD 2019, 56).

The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes also introduced beneficial ownership requirements into standards for the automatic exchange of information between tax authorities (IADB and OECD 2019), and have outlined a data structure for this in the form of the Common Reporting Standard (CRS) (Davies and Gower 2016). Although this stops short of requiring public access to the data, it does highlight the importance of structured beneficial ownership data in the taxation context and the development of solid international foundations for this.

A normative basis for centralised and publicly accessible beneficial ownership registers can be found in the the fifth EU Anti-Money Laundering Directive (Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 Amending Directive (EU) 2015/849 on the Prevention of the Use of the Financial System for the Purposes of Money Laundering or Terrorist Financing, and Amending Directives 2009/138/EC and 2013/36/EU (Text with EEA Relevance) 2018). This requires all EU Member States to establish centralised beneficial ownership registers and to provide public access to these by 2020. Investigations by Global Witness in March 2020 found progress towards this had been limited, with many countries yet to establish or make public their registers (Global Witness 2020). Nevertheless, the EU position on centralised and public registers has significant normative influence on future global arrangements for beneficial ownership disclosure.

Sectoral Standards

Standards for public data on companies and beneficial ownership disclosure have been developed in a number of specific sectors, or in relation to particular areas of government financing.

Financial Institutions

Following the 2008 financial crisis, the Financial Stability Board (FSB) called for the creation of a global legal entity identifier for parties to financial transactions. This resulted in the creation of the LEI and ISO standard 17442, along with a federated model for legal entities to obtain an LEI, and have their information recorded in an open dataset. Initially covering basic data on legal entities (name, status, address, etc.), from 2017 an LEI could also have attached ‘Level 2’ information on ‘who owns who’ providing information on direct and indirect parent entities, based on accounting definitions.

Extractives Industry Transparency Initiative (EITI)

Revisions to the 2016 Extractives Industry Transparency Initiative (EITI) Standard established a requirement that “all oil, gas and mining companies that apply for, or hold a participating interest in an exploration or production oil, gas or mining license or contract in their countries publish the names of their real owners” and recommended that “beneficial ownership information is made available through public registers.” This is a binding requirement for the more than 50 EITI member countries, to be assessed through EITI validation.

COVID Relief Funds and Public Procurement

In response to the COVID-19 crisis, the International Monetary Fund has provided funds to support more than 80 countries. Analysis by Transparency International finds that upwards of 40 countries in receipt of financial assistance have made commitments to publish beneficial ownership information of companies receiving COVID-19 procurement contracts as part of the assistance package (Transparency International 2020).

Civil Society Standards

The Open Ownership Principles, first published in Summer 2020 and launched in December 2020, set out a basis for effective beneficial ownership disclosure. These incorporate requirements for robust definitions, central registers, and public access to structured data. These principles consolidate the commitments made by members of the global Beneficial Ownership Leadership Group, which currently comprises Armenia, Latvia, Kenya, Mexico, Nigeria, Norway, and the Slovak Republic and reflect best practice learning from implementation of beneficial ownership reforms with governments, and offer a likely long-term benchmark for maximal beneficial ownership transparency, as opposed to the more minimal bar set in FATF recommendations.

Privacy Considerations

While the publication of basic corporate information is unlikely to raise significant privacy concerns, the disclosure of ownership- and control-related information inherently involves personally identifying information (names, nationalities, identifiers, and even addresses of natural persons). Forestater (2017) has questioned whether the benefits from information disclosure justify the invasion of privacy created by disclosing information about individuals and their connection to firms. However, the Tax Justice Network argues that “Limited liability is a privilege conferred by society at large. In exchange, the minimum safeguard it legitimately requires for the functioning of markets and the rule of law is that the identity of owners must be publicly available. This holds true especially for private companies that do not trade their shares on a stock exchange.” (TJN 2020). Open Ownership and partners argue that public disclosure of ownership information is compatible with data protection principles, providing that a careful balance is struck to share only the information required to meet beneficial ownership transparency goals, and with “carefully designed and narrowly defined exemption process[es]” in place “to allow individuals with legitimate security or privacy concerns to request that their details are not published on the open register.” (Open Ownership, The B Team, and The Engine Room 2019). The principle that limited personal information can be recorded and stored in an accessible company register was also supported in a 2017 ruling of the European Court of Justice denying a general ‘right to be forgotten’ applied to company registers (CJEU 2017).

Other Forms of Company Information

The pilot edition of the Barometer considered a range of company information use cases that extended beyond basic company data and beneficial ownership data, specifically data that might be used to analyse social, environmental, and equity issues across the economy.

Examples of this include using data to understand gender pay gaps (O’Donnell et al. 2020), the awarding of public contracts to women or minority-owned businesses (Value for Women and Open Contracting Partnership 2020), or to assess the environmental performance of companies.

Where countries have instituted specific disclosure requirements for firms on social or economic issues, the inclusion of this information in structured company data has the potential to support high-impact policy research, complementing existing survey-based approaches such as SDG indicator 5.5.2, which relies upon periodic surveys to understand the representation in managerial positions. However, we were not able to locate any substantial examples of corporate registers incorporating structured social or environmental data, albeit that it might be possible to extract this data from the filings held within some registers.

We carried out a specific assessment of whether we could include gender pay gap data within our assessment. A 2020 policy note by Center for Global Development, Open Data Charter, Open Data for Development, IDRC, the Open Government Partnership, and B Team points to research showing at least 10 countries have requirements for firms (generally above a certain size threshold) to report on gender pay gaps, albeit with only a few of these requiring centralised disclosure, and none currently making this part of filings to a company registrar. In the UK, gender pay gap reporting takes place via a platform at https://gender-pay-gap.service.gov.uk/, although reporting requirements were suspended during the COVID-19 pandemic.

Existing Data Sources

The Barometer carried out an assessment of existing data sources that might either be used as secondary data in place of primary data collection or that might provide sources for our researchers to draw upon.

Open Corporates Index

With support from the World Bank Institute, Open Corporates developed the Open Company Data Index in 2012, now providing an assessment of company registers for all countries in the world against six criteria (online searchability, licensing, data availability, directors information, accounts information and shareholder information). This has been updated on a rolling basis when changes are reported to Open Corporates or discovered through their work. However, many records have not been updated since 2014, and the methodology does not clearly identify how different forms of limited liability company registration are approached should a country have multiple company forms.

Financial Secrecy Index

The Financial Secrecy Index was launched by the Tax Justice Network in February 2018, and produced a second edition in 2020 covering 133 jurisdictions. It consists of twenty financial secrecy indicators (FSIs) and is produced through desk research using established sources and incorporates input from government Ministries of Finance, National Audit Offices, and/or Financial Intelligence Units (albeit reporting a low response rate to their questionnaire). Each indicator is computed from a number of underlying questions, each based on robust definitions and with detailed sourcing information gathered and made available through an interactive database. Evidence in relation to a number of indicators are particularly relevant for the Global Data Barometer:

  • FSI3: Recorded Company Ownership—does the relevant authority obtain and keep updated details of the legal and beneficial ownership of companies?
  • FSI6: Public Company Ownership—does the relevant authority require all available types of companies with limited liability to publish updated beneficial ownership and/or legal ownership information on public records accessible for free via the internet, or against a fee?
  • FSI7: Public Company Accounts—does the relevant authority require that limited liability company accounts be filed with a governmental authority and are made available for inspection by anyone for free, or against a fee?

Although there are significant overlaps of interest and data, there are also a number of differences that prevent direct use of the FSI to generate secondary indicators.

  • ‘Weakest link’ vs ‘bright spots’ design. The FSI adopts a ‘weakest link’ design principle, such that if a country has multiple forms of company registration, and only one has available data, a high secrecy score would be applied. The GDB adopts a ‘bright spots’ design, where an assessment is made of the best example of available data (e.g. either for particular forms of company or where transparency requirements are applied to a specific sector), noting whether the best case is representative of other possible cases or is a positive outlier.
  • No disaggregation of dataset properties. The FSI data does not allow users to determine whether published datasets contain crucial company identifiers that are a linkage point between different accountability datasets, and does not provide detail on the licensing of data.

Other Sources

There are a number of other sources that may, in future, have the potential to support questions and indicators that would highlight the state of corporate ownership and beneficial ownership transparency. While not available as sources for the current Barometer pilot edition, they would be worth monitoring and/or engaging with in future.

  • The World Bank Doing Business survey covers processes of business registration, but does not currently include questions on access to corporate data.
  • The International Business Registers Survey collects data from registrars and appears to have some information on beneficial ownership, albeit without publishing detailed survey responses.
  • The EUROPam (European Public Accountability Mechanisms) project included a question on whether procurement laws in Europe require disclosure of beneficial owners of firms involved in public procurement. The data was last updated in 2017, and indicates only one country with such a requirement (Czech Republic).

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