Publication of the so-called “PanamaPapers” focused public interest on how certain politicians,celebrities, and other elites may have used elaboratecorporate structures and offshore tax havens to concealtheir beneficial ownership of companies and obscure theirpersonal assets. Rather than taking the Panama Papers as anindication of the need for more and stricter disclosure andreporting rules, this paper advocates an alternativeapproach. We need to start by acknowledging that manycompanies are currently experiencing "disclosure andreporting fatigue", in which the constant demand for“more” and “better” transparency and reporting is having theunintended effect of promoting indifference or evasiveness.The practice of disclosure and reporting is widely perceivedas an obligation to be fulfilled and not as an opportunityto add value to a firm. This is confirmed by the findings ofan empirical study conducted by the authors of this paperthat examines how disclosure rules operate in practiceacross various jurisdictions. The key takeaway of the studyis that—even in jurisdictions that have a robust disclosureregime—the majority of firms engage in “grudging” or“boilerplate” compliance, in which ownership and controlstructures are not adequately revealed in an accessible wayand, perhaps more importantly, the impact of these ownershipand control structures on the governance of a company isobscured. In this paper the authors advocate an approachbased on the current communication strategy of a minority offirms in their sample—firms that engage in what the authorscharacterize as “open communication.” These firms presentinformation on control structures—and their effect ongovernance—in a direct, accessible, and highly personalizedmanner. Such firms seem to recognize the commercial andother strategic benefits to be gained from opencommunication. The paper explores the implications of suchan approach for both business and regulators.
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