Question 1. What is meant by the term "corporate secrecy"? secrecy? Question 3. What are the economic and social purposes, benefits, costs and implications of corporate secrecy, from the viewpoints of giant corporations, small businesses, consumers, farmers, inventors, investors, economists, scholars, labor, regulatory agencies concerned with such matters as fair pricing and the protection of the environment, and other groups in the society? B. Regular and routine corporate information disclosure today. Question 4. What kinds and quantities of information are the giant corporations furnishing to the public, to government, or to both today- (a) through their published annual reports and voluntary disclosures to private directories and various business and investor publications? (b) through required filings with various agencies of Federal, State and local government? Question 5. How accessible or inaccessible to the public is the information previously filed and currently being filed by giant corporations with the various agencies of government? SIXTEEN MAJOR QUESTIONS Question 6. Page 2 What problems of comparability and comprehensibility exist in using corporate information filed with government? C. Irregular and occasional corporate information disclosure. Question 7. What kinds of information about giant corporations have come into the public domain through other than routine sources, such as- Question 8. How can the small businessman and small farmer (and their lawyers), the small investor (and his market analyst or mutual fund), the working man (and his trade union), the consumer (and his public advocates), and all the other interested persons find--and use-the information that is technically "available"--but deeply buried-in these obscure, immense and labyrinthine sources? Question 9. How can the groups mentioned in Question 8 themselves employ these special and occasional agencies--the courts, the Congress, corporate "whistle blowers"--to cause corporate giants to disclose further information? D. Routine corporate NON-disclosure today: proper and improper areas of secrecy. Question 10. What kinds of information from and about giant corporations should be but are not today routinely available to the public, in a systematic, accessible form? Question 11. What kinds of information are giant corporations today furnishing to government agencies (and to what government agencies) "in confidence"--that is, with a promise from the government that the public will have no access to it? Question 12. What are the proper purposes, scope and limitations of confidential treatment for corporate disclosures to government agencies? SIXTEEN MAJOR QUESTIONS Page 3 Question 13. What are the legitimate, defensible purposes and areas of corporate secrecy? How much and what kinds of corporate information quite properly should be withheld- E. (a) from the public at large but not from government? (b) from everyone outside the company, including government? Areas for administrative improvement. Question 14. Which government agencies, under existing statutory authority, could do a better job of collecting and publishing information from and about giant corporations? F. Areas for legislative improvement. How? Question 15. What existing legislation impairs or impedes disclosure of information about giant corporations that should be in the public domain but is not? Question 16. What existing legislation should be amended or repealed, and what new legislation should be considered and enacted, to cause information about giant corporations to come into the public domain in more adequate quantity and quality and in more accessible forms and places? Washington August 1971 Working Paper A THE NATURE AND DIMENSIONS OF CORPORATE SECRECY The Subcommittee's Major Questions 1 through 3: Discussion, Theories, and Some Further Questions * Question 1. What is meant by the term "corporate secrecy"? As used here, "corporate secrecy" means the conscious, deliberate withholding from the public, for whatever reasons, of valuable information possessed by corporate management. Unless you For say more than that, you cannot say that corporate secrecy is "good" or "bad." Some types of corporate secrecy serve useful economic and social ends. Other types do not. Also, the same type of corporate secrecy may be "good" in one context and "bad" in another. example, it may be proper and even desirable for small, simple corporations to keep to themselves certain kinds of information, while it would be undesirable for giant, complex corporations to keep the same kind of information secret. One theory the hearings will explore is that, as things often work out today, the actual situation is just the reverse: small business must live in a goldfish * This working paper was prepared by Senator Gaylord Nelson, Chairman, Subcommittee on Monopoly of the Senate Small Business Committee, with the assistance of the subcommittee staff. It is intended to serve as an aid to discussion at hearings on Corporate Secrecy. This paper has not been approved or disapproved by other members of the subcommittee or full committee and should not, therefore, be read as necessarily reflecting the views of either. (Footnotes are at the end of the paper.) Page 2 bowl, while big business successfully hides from the public information that should be freely available to help competitive capitalism work better for all the people. Question 2. What are the principal aspects_and_types of corporate secrecy? As these hearings begin, the Subcommittee will be thinking about the policies and practices of giant corporations in concealing or disclosing seven types of valuable information. They are: (1) Financial information about the separate organizational, industrial and geographical segments of the business, and the interrelationships of the segments; (2) Information on industrial and natural resources owner ship and control; (3) Product information needed by or valuable to consumers; Information on new discoveries, and on how and why decisions are made to put on the market or withhold from the market (4) new products and technologies; (5) Information about government procurement and government contracts; (6) Environmental impact information; and (7) Information on employment policies and working conditions. |