Robert Weissman, president of Public Citizen, on the introduction of the new arbitration rule in the US
“Rip-off clauses in the fine print of consumer contracts may be the single most important way that big banks and financial companies have escaped accountability for cheating, conning, fleecing, defrauding and plundering consumers.”
Peter van Veen, director of Transparency International UK’s Business Integrity Programme
“The role of professionals in ensuring their employer or client is not engaging in corrupt practices is identical whether it is a private or public company. Accountants, whether in an auditing, financial control or more strategic role, are key in ensuring the business is operating with integrity. On an individual level, the accountant should ensure they are not complicit in a corrupt practice. Likewise, accountants and finance professionals should take action if they suspect or know about corrupt practices in the organisation.
“Accountants when acting in an external auditor or advisory capacity have similar responsibilities. Advisers should also ensure that they are not wittingly or unwittingly helping their client launder money, evade tax or hide their corrupt practice through setting up complex off-shore constructs, the purpose of which, on the balance of probability, can only be for such a purpose.”
Peter Swabey, policy and research director, ICSA: The Governance Institute
“Statutory directors’ duties apply to all directors. Arguing that there should be different expectations on the board of directors because there is a different ownership structure is a red herring.
“Company accountability should be dependent on size and societal impact, by which we mean the impact that that company has on the society in which it operates. This is the price that such companies pay for the use of societal capital and the significant benefit of limited liability.”
Subarna Banerjee, audit partner, UHY Hacker Young
“Private companies must be held to a certain level of accountability, especially as they enjoy the benefits of having limited liability. However, a distinction needs to be made between private and public companies. Often, private companies tend to be smaller and are owned and controlled by the same individuals. One would hope that these individuals are fully informed about the performance and the strategy of those companies.
“Public companies, on the other hand, often have shareholders who are remote from those reporting on performance and formulating their strategy. As such, public companies must be held to a higher standard when it comes to accountability so that investment decisions can be made based on accurate information.”
Steve Ballmer, former Microsoft CEO and the current owner of the Los Angeles Clippers basketball team, in an interview with Wired
“Some companies making money right now say they’re investing for the future. Where’s the accountability? You can say, ‘Will, the ultimate accountability’s the stock price.’ It sort of is, but it sort of isn’t. You can talk your stock price up. But you can’t talk up wins and losses.”
Peter Montagnon, associate director of the Institute of Business Ethics
“There are two ways of looking at this. Public companies take money from outside shareholders to which they must be accountable. This is why investor protection is built into the Listing Rules and why companies are required to deliver accountability in a way private companies are not.
“The other way has to do with the relationship between the company and society. All companies should be accountable for this. This is borne out by the directors’ duties spelled out in the UK Companies Act 2006. Some private companies are very large and have a correspondingly large impact on society. The Act implies that the playing field should be level, but in practice it is not. Listed companies do bear a responsibility towards the outsiders whose capital they are using, but they should not bear the full burden of fulfilling broader obligations to stakeholders while private companies get off scot free.”
Annabel Lee Hogg, senior associate for the governance and transparency initiative at The B Team
“We cannot truly address the problem of anonymous companies across markets without government leadership.”
Marianna Fotaki, professor of business ethics at Warwick Business School, University of Warwick
“While taxpayers finance public companies, shareholders choose to become the owners of the private ones. This would make a strong case for public companies to be held to higher accountability as opposed to private companies. Yet this is not the case.
“First, there is the issue of externalities: private companies often benefit from using public goods without properly accounting for these in their business models. This could concern a much wider range of stakeholders including the communities that are directly affected, or the taxpayers, and not just the shareholders.
“Second, while the costs involved in running a public company are visible, a private competitor can hide these. Finally, private companies often produce public goods and are paid from public funds for their services, such as when NHS procedures are contracted out to private, for-profit firms. Yet most patients are not aware that the clinical governance and accountability requirements that are compulsory for NHS providers do not apply in the same way for private hospitals, which could make them less safe.”
Elizabeth Denham, UK information commissioner, speaking at an ICAEW lecture
“General Data Protection Regulation mandates organisations to put into place comprehensive but proportionate governance measures. Good practice tools championed by the ICO for a long time, such as privacy impact assessments and privacy by design, are now legally required in certain circumstances.
“It requires a change in organisational culture. That isn’t easy to do and it’s certainly true that accountability cannot just be bolted on. It has to be a part of the company’s overall systems approach to how it processes personal data.”
Justin Madders MP, reacting on Twitter to Matthew Taylor’s review into modern working practices
“Worrying [that] one of [the] conclusions is relying on good corporate governance rather than regulation. Lack of ethics in business is how we got here.”
Clive Garston, corporate consultant at law firm DAC Beachcroft LLP
“The Work and Pensions Committee recommended that large private companies should be subject to the UK Corporate Governance Code and there have been suggestions that directors’ duties should be extended to include a duty to pension trustees.
“I do not believe that there is any need to extend the current duties, but would support a requirement for large private companies to comply with a corporate governance code. It should be on a comply-or-explain basis and the requirement for non-executive directors should have a major influence on boardroom practice, promote transparency and increase accountability.
“However it is important to remember that most private companies have a small number of shareholders. As such, the extension of any corporate governance requirements to large private companies ought to focus solely on those that would prove relevant and beneficial to wider stakeholders such as employees and creditors. It is important that any increase in accountability should be proportional and not impose unnecessary and burdensome requirements, which would affect the success of the company.”
James Jarvis, corporate governance analyst at the Institute of Directors
“The unlisted sector represents 99% of all UK businesses, it provides employment for millions and powers the economy. While directors of unlisted companies have the same legal requirements as those on publicly listed boards, they are not required to adhere to the same reporting requirements.
“This leads to what we believe is a ‘black box’ situation in the unlisted sector with governance issues not known until it is too late. While these firms may not have shareholders in the publicly listed sense many do have a large and diverse number of stakeholders, dependent on the continued success and long-term sustainability of the company.
“That said, the public need to see our very largest private companies being held to similar levels of accountability as their listed counterpart and the companies themselves need to ensure they are instilling best practice and good culture throughout their organisation.”