The latest win in the global push for transparent company data came last July, when the legislature of the US state of Illinois passed a bill which committed the Secretary of State to make data from their official company register freely and openly available.
We at OpenCorporates welcome this important and critical step. After all, it’s part of our mission to advocate for laws, policies and practices which promote open company data and corporate transparency for the benefit of all.
In this blog, we hear from two politicians who were instrumental in the bill’s successful passage: Representative Will Guzzardi of the Illinois House of Representatives and Senator John Connor of the State Senate.
They talk about why they supported the new law for business data transparency, and they explain why they believe it will create a more trusted business environment in Illinois – as well as benefiting wider society.
Unpicking the bill: Removing hurdles to transparency
The new legislation makes Illinois’ company data registry freely open for the public to access. This represents a dramatic improvement on Illinois’ previously restrictive company data policies, which lagged behind most other US states.
As the US Company Data: State of the Union report we published in January 2020 highlighted, Illinois previously ranked almost the lowest out of US states in terms of how open its company data was – with a ranking of 20 out of 100.
This is because whilst the data was being collected, it was only made available to paying users. Accessibility was further harmed by the fact that it was a criminal offence to scrape the data.
As Representative Guzzardi explained in our recent interview: “…people had to pay to access our data and could face criminal charges for scraping it, it sounds so strange”. Senator Connor added: “We were forcing companies to go through hurdles or unusual methods to access what should have been openly and transparently available information”.
Critically, the new Public Act 102-0049 amended Illinois’ existing Business Corporation Act to remove these restrictions and make the data openly available.
Some of the key amendments include:
- That the Secretary of State will publish their company data “as open data”. This means that the data must be maintained by the Secretary of State “in a machine readable format that is freely available to the public under an open license, without registration requirement, and without any other restrictions that would impede its use or reuse”.
- Removal of charges for accessing the data.
Why the bill matters
When asked why he supported the bill, Representative Guzzardi said: “Making this data available in a free, accessible and searchable way will provide more transparency on the state’s business environment for everyone. This will make it easier for us to understand what actors are doing in business in Illinois and how our state’s economy is structured and functioning. My hope is it will create a more level playing field for businesses in our state”.
He expressed hope that the new law improves public trust in government: “It’s important that people view government as an entity that is operating in the public good. The idea that we would be hiding government data and only sharing it with certain folks who pay to get access to it contributes to people’s sense that government isn’t acting in their best interests”.
Senator Connor said he backed the bill because it brings Illinois in line with other states in support of corporate transparency: “When I learned that we were almost the only state in the Union that seemed to be putting up such roadblocks to obtaining what should have been open and transparently available information, I was only too happy to get behind the effort”, he said.
Impact on Illinois’ citizens and its business environment
Representative Guzzardi said the bill will help regulatory oversight. “Government cannot regulate businesses properly if we don’t know what they are doing”, he said. “Modernising our data systems and being able to communicate with data systems in other states lets us see how our business entities are operating across state lines. Our regulatory apparatus needs to be as sophisticated as those we are trying to regulate and this is a really important step in bringing our government up to speed”.
Senator Connor pointed to the growing importance of data for businesses and their need for data that is easy to access and embed in their platforms. “We all know big data and AI analysis informs so many areas of business, so we want to be at the forefront of best practices”, he said. “Our vestigial rules from decades past were causing a drag on our modern economy which relies on data”.
Why the bill achieved bipartisan support
At a time when many commentators say there is increasing polarisation in US politics, this bill passed easily with strong bipartisan support. Senator Connor said this is because the changes were widely regarded as necessary but most people had previously been unaware the problem existed: “Most legislators like me had assumed we had open data available for businesses in Illinois. Once this was explained to people, it was very uncontroversial. No one was pushing from the other side to say we need to keep the hurdles in place, it was just that lack of awareness and inertia that had stopped it in the past”.
Representative Guzzardi added: “Once you sit down to see why the system doesn’t work, it seems obvious that these changes should be done. It owes a lot to the work that we did in our conversations with the Secretary of State’s office that manages this data. We ended up with a bill that there was no opposition to and that was really helpful to sell to our colleagues. We kept our bill intact with all the strong provisions we wanted it to have”.
Why was the bill passed now?
Representative Guzzardi said the bill is timely because the eyes of the world are turning to the ways that some companies and their officers can hide their activities: “Issues around corporate transparency are more in the public eye now after leaked documents about secret offshore tax havens used by corporations”, he said. “It is more to the front of the general public’s mind that corporations can hide stuff and it is hurting us, so the idea of making data transparent and open seems all the more obvious”.
The bill’s timing was particularly apt for Senator Connor: “I will be out of the Senate after this session and, if I had known about the problem earlier, it would have been one of the first things I did”, he said. “But I hope the lack of controversy in this bill will get others to take a look at old rules and ask how they can be updated and modernised in the new digital economy”.
How does the bill fit into an overall vision to improve Illinois’ business climate through modernising regulations?
Senator Connor said he hopes this legislation will trigger a wider review of business regulations in Illinois: “I hope this bill is just the tip of the spear for making data more accessible in Illinois and that we can go where other states have to make data publicly available in formats that are very easy to analyse”, he said. “For example, the comptroller’s office is very interested in our financial reports being put into a machine readable format and I’m sure there are other agencies where we can make data more accessible”.
Next steps in the battle for open data
As our interview shows, the bill passed easily because, when people realised what restrictions were placed on company data, it became obvious that change was necessary.
But there are many other jurisdictions around the world that withhold access or force users to jump through hoops.
OpenCorporates believes that information about the world’s companies should be made freely and openly available for all – so this is just one stage in a wider and critically important journey.
Let’s celebrate this latest win and continue the push for open company data as a necessary ingredient to promoting corporate transparency.
You may also be interested in…
- Fresh US company data
In this blog post, we explain why fresh US company data helps you solve critical business challenges in a more informed way, and how we deliver fresh data to you.
Read blog > - Want to collect the world’s company data by yourself? Read this first!
This post outlines the key challenges with aggregating the world’s company data in a way that’s truly useful and sets out why some of the world’s largest organisations rely on OpenCorporates for this instead.
Read blog post >
blog.opencorporates.com 