Why Open Corporate Data Matters
BY David Eaves | Tuesday, May 1 2012
On January 21st of this year the Economist had a powerful series of articles – including a fantastic leader - about the need for transparency around company/corporate registries. If you’ve not read them, stop right now and go do so.
We don’t normally think of corporate data as democratic data. But limited liability – the right to have an legal entity that protects its shareholders from personal bankruptcy – is an enormous privilege conferred by the state to individuals. In a 19th century democracy – to say nothing of a 21st century one - who is making use of this privilege, and to what ends, should be a right of public knowledge. Indeed, it once was.
Increasingly however, this data is becoming harder to access, at the very time when access is actually getting easier. For example, in my home province of British Columbia the government charges $5 per corporate registry. In an era where someone had to find a physical record, photocopy and send it to you this made sense. Today the entire database should be online and searchable, and yet the $5 fee persists.
Not only does this frustrate journalists but it adds costs to doing business in the province. It also stifles innovation that could help public discourse and debate around companies. I remember back in 2001 when the first version of TheyRule was released. This intrepid website maps the boards of the 1000 largest companies in the United States allowing you to see who sits on which boards. A fantastic tool for ordinary citizens and journalists alike it allows for cool visualization like this one, which shows all the boards that officials from George W. Bush’s administration now sit on.
OpenCorporates, a UK based company is seeking to change that. Its goal is to make all corporate data in the world open and accessible to anyone who wishes to find it. Already it has data on 42,179,942 companies in 52 jurisdictions around the world. Recently, they assessed all the member countries of the Open Government Partnership on whether their country’s corporate registry data was free & open to search, was open licensed, and shared directors information, statutory filings and shareholders information. No country did particularly well, although interestingly several new arrivals to the world of corporate data including Czech Republic, Albania, Slovak Republic did relatively well.
As the Economist pointed out, closed corporate data has a real impact on the economy and democracy:
“Anonymously owned companies can buy property, make deals (and renege on them), launch intimidating lawsuits, manipulate tenders—and disappear when the going gets tough. Those who seek redress run into baffling bureaucracy and a legal morass. Seeking real names and addresses means dealing with lawyers and accountants who see it as their job to shield their clients from nosy outsiders.”
Open Corporate data isn’t just about lowering the cost of doing business, it is about creating fairer and more transparent markets.
[Full disclosure – I sit on the advisory board of Open Corporates, the entity the published the following report. My duty is not to advise on strategy but to advise on privacy issues and ensure that OpenCorporates works in the public interest.]
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