The Corporate Accountability Network launched its website this morning with this blog post:
The Corporate Accountability Network (CAN) is a new initiative that will be the first ever NGO / CSO aimed specifically at targeting the weaknesses in the accounting disclosure of all companies. Its aim is to ensure that the accounts of all companies are prepared for the benefit of all its stakeholders. The CAN thinks that those stakeholders of a company are:
- the suppliers of its capital;
- its trading partners;
- its employees;
- regulators;
- its tax authorities, and
- all in civil society that it might engage with.
At present, the rules set by the regulators of the accountancy profession suggest that only the first group - the suppliers of capital to a company - are of concern when accounts are prepared. This means that accounting data that many who engage with a company might need to manage the risk that a company imposes on them -Β not least because of the fact that its shareholders enjoy the enormous privilege of having limited liability with regard to its debts - is not available for them to use.
The Corporate Accountability Network has launched its website today - 1 May 2019. This describes what the Corporate Accountability Network is; who is behind it and how it might be funded. It also explains the nature of the problem it wants to tackle, and why it thinks it is important. And it describes the first projects the CAN wants to take on. These include a project on Accounting for the Local Economy (ALE from the CAN) and Accounting for People (People CAN). There are other planned worked programmes in development.
CAN's director, Richard Murphy, who is a chartered accountant, a long term tax and economic justice campaigner and at present Professor of Practice in International Political Economy at City, University of London, said of the website launch:
The Corporate Accountability Network is tackling an issue that no one has addressed before, which is why the accounts of companies are not addressing the needs of most users of those accounts. This is an issue that goes right to the heart of the problem at the core of the mdoern economy, which is that people are losing faith in business because they feel alienated from it.
We believe that business, government and communities can and should work closely with each other. However, that is only possible if people have the information they need to appraise the businesses with which they engage. That in turn means businesses have to learn to trust people with this data, which it is their right to have because the owners of all limited companies enjoy the enormous advanatge of limited liability that has been granted to them by society at large.
Our aim is to work with business, the accountancy profession, academics, civil society organisations, trade unions and others to build a consensus on how society might in future deliver the accounting data that people need to make appropriate appraisal of the risks arising from engaging with a company, which is not available in most cases at present. Our new website is the first stage in this process.
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Congratulations on the launch of CAN, this is a really exciting development!
Perhaps at some point you could have a CAN highlighting responsibilty for the climate emergency – Climate Action Now?
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Hi Richard. FYI there is a typo in the accounts section of your new website. It states: “Its first accounts are expected to be for the year to 31 March 2010……..”
Thanks…
It will not be the only one
I like ‘ALE from the CAN.’
Good to see that, serious and important though this project is, you retain a sense of humour. π
Itβs pretty essential
Just one observation Richard, the suppliers of capital (who I agree should be rewarded) are not necessarily and fact invariably are not the shareholders. They have long since been bought out. The shareholders (I exclude SME’s which are a special case) are only the very rich.
The requirement is to report to shareholders and suppliers of capital
There’s a section entitled “Who are we?”
It lists one name.
Is this accidental or deliberate, I wonder.
http://www.corporateaccountabilitynet.work/who-we-are/people/
Shouldn’t a lot of this information also be made public for trusts and pension schemes?
I also think some unlimited businesses, above an appropriate threshold, should also provide some public reports. They also impact employees, customers and creditors and could be seen as a method to maintain secrecy.
While limited liability is a privilege for entities, bankruptcy is kind of the equivalent for individuals and can impact just as much. Irresponsible lending can be just as devestating as irresponsible borrowing, yet its so easy to only blame the borrower.
Pension fund accounting is an issue I have wanted to address for years: it is absurd how little they report to their members
Is one of the ideas behind C.A.N. to make outsourcing government work better for suppliers and customers? – to know who is paying their subcontractors on time, who has a previous history of delays and penalties, that sort of thing. So that government and Local Authorities can make better informed choices.
No: Government can secure the information it needs for outsourcing on the basis of its contracts
“…. Government can secure the information it needs for outsourcing on the basis of its contracts…”
Like making sure a company has ferries, and ports to operate them from, before signing multi-million pound deals…..???
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I’m pleased to see this initiative. The concept of Social Accounts/Accounting is well-established in certain parts of the social enterprise and fair trade sectors. While this move on accountability is not exactly comparable, the greater transparency on the part of private companies which it seeks is to be welcomed.
Thanks