Blog / Sept. 27, 2016

How secret company ownership is a risk to businesses and investors

In order to make sound and responsible investment decisions, investors need to know who they are dealing with and what their track record is. 

When the criminal and corrupt hide behind secret or anonymously-owned companies, it makes it very hard for shareholders to manage all types of risk. This is because sometimes it can be nearly impossible to identify the real people who own and control companies (also known as “beneficial owners”).

I’m pleased to have been interviewed by Principles for Responsible Investment’s (PRI) Olivia Mooney for the podcast segment, Corporate Ownership Transparency (listen to the podcast here) where we discussed the financial and non-financial risks, such as legal and reputational risks, that anonymously owned companies pose to businesses and investors. Company secrecy and these risks can damage the global economy, and hurt unwitting investors and pension fund holders. 

Chancing It

The podcast was released just after Global Witness and Global Financial Integrity published Chancing it: How secret company ownership is a risk to investors, which sets out examples from across several industries of the hidden dangers that anonymously-owned companies present for investors and businesses. It also provides tools to help the business community manage risks stemming from anonymously-owned companies.

Supporters would be joining a growing list of global investors managing over $740 billion in assets that have called for laws that require disclosure of the real owners of American companies. This influential coalition, including Hermes Equity Ownership Services and Trillium Asset Management has sent letters to Congress calling for an end to shell company secrecy. Read the full letter to the U.S. Senate here and the U.S. House here

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