I am in the US to talk about country-by-country reporting at Yale University.
The slides I’ll be using are here.
As I say in them:
- CBC is a new way of looking at the MNC;
- It is in essence a demand for a profit and loss account and limited balance sheet for each country in which the MNC trades;
- But it’s also something much more than that;
- This is an accounting system that roots the corporation in the countries that host it – and not somewhere floating above them; and
- And this is accounting that says the MNC is an entity in its own right with responsibilities all of its own – it’s not just an agent for its owners.
What are those responsibilities?
- To meet need, and so make profit;
- To do so sustainably or we wouldn’t invest in it;
- To do no harm;
- To settle its obligations;
- To be accountable for doing so; and
- To be honest in that accounting.
But that means it is accountable to:
- The equity investor group (shareholders);
- The loan creditor group (banks and bondholders);
- The analyst-adviser group who advise the above groups;
- Business partners;
- The surrounding community;
- Civil society organizations; and
- Governments and their institutions.
And it is precisely because of this diversity that is both universal, and without exception local, that we need country-by-country reporting.
The rest is on the slides.
With thinks to the Task Force on Financial Integrity and Economic Development for inviting me over for this event.
Written by Richard Murphy