Investigate any person who owns at least 10% of a company through due diligence
It is common practice for companies to identify any person who owns 25% or more of a company they are considering for investment or as a partner. While a step in the right direction, identifying ownership at 25% or higher shares still allows ultimate owners to be hidden, and anonymous shell companies to be used as vehicles to mask nefarious behaviour. One solution is to collect ownership information on any owner with at least 10% stakes in the company ownership.
Raise the bar on due diligence, and make it a company standard to investigate beneficial ownership down to 10% for all investment, supplier and partnering decisions, helping to create a new standard for global transparency.
- Better due diligence: Companies who collect beneficial ownership information down to 10% would know who they are really doing business with, keeping their company and investments even safer from illicit activity and decreasing their exposure. Detailed knowledge of who you are dealing with is the best defense against undesirable associations.
- Avoid regulatory risk: Global regulators are handing out fines at an increased pace to companies connected to corrupt activities. Companies and investors can avoid reputational and regulatory risks by investigating down to 10%.
- Public trust: The most important benefit however, is garnering public trust. Companies and individuals are more likely to do business with an entity that it knows is protecting its investment.