Gender and beneficial ownership transparency

Overview

Policy experts widely recognise both the importance of using gender as a dimension of analysis for human and economic development as well as the need for policies that advance gender equality. This is exemplified in United Nations (UN) agreements, such as the 1979 Convention on the Elimination of all Forms of Discrimination against Women[1] and the 2015 Sustainable Development Goals (SDGs).[2] Governments introduce policies that aim to specifically advance gender equality, and build gender-responsive approaches into different policies.

Simultaneously, since 2015, over 110 countries have committed to implementing beneficial ownership transparency (BOT) reforms. BOT involves governments collecting information about the individuals who ultimately own and control companies in the form of disclosures from companies, and making this information available to a range of actors to achieve different policy aims. Despite efforts to mainstream gender in policy and the current momentum of BOT reforms, the link between BOT, gender, and gender equality remains underexplored.

To date, there has been no comprehensive exploration of how BOT reforms interact with gender equality or how gender inequalities may affect the collection of beneficial ownership (BO) data. As such, neither the potential benefits nor the limitations and risks of using BO information for gender equality policies or initiatives have been clearly identified. In an effort to address this gap, this report explores:

• the links and interaction between BOT and gender equality policy;
• how sex-disaggregated data is collected and used in areas related to women’s enterprise;
• how governments hold sex data of beneficial owners;
• the potential benefits and limitations of using BO information for gender equality purposes;
• the advantages and drawbacks of explicitly collecting sex data of beneficial owners of companies as part of disclosures; and
• the potential value and risks of publishing sex-disaggregated BO data by governments.

Both BOT and gender equality are policy areas that require high-quality and reliable data to fulfil their aims. BOT reforms seek to reveal the real owners of companies by collecting sufficient data to facilitate the unambiguous identification of the natural person who ultimately owns or controls a company.[3] They are implemented to advance a range of policy aims, such as combating corruption and illicit financial flows (IFFs), some of which have gendered dimensions. Additionally, gender inequality can affect the information collected about beneficial owners. Gender equality promotes “equal value, recognition, and participation in all spheres of public and private life”. [4] The availability of data disaggregated by sex is regarded by many as an essential measure for achieving gender equality goals.

Research on women’s enterprise suggests that sex-disaggregated data related to ownership, control, and management of businesses are valuable to gender-responsive policy. However, these data also have significant limitations. Whilst the topic remains underexplored, the use of sex-disaggregated BO data could provide insights into characteristics of women’s economic empowerment that are specific to the ultimate ownership and control of companies.

At the same time, most countries enshrine the right to privacy in law, and data protection legislation has evolved to govern the proper use of data with respect to privacy. In this context, governments must determine two things: first, whether the collection, processing, and potential publication of sex data of beneficial owners for the purposes of gender equality has a legal basis; and, if so, how to balance the sometimes competing aims of promoting gender equality through the use of sex-disaggregated BO data, revealing the real owners of companies through BOT, and the privacy and security of individuals.

Findings

The type and amount of information governments request in declarations of BO is guided by the scope of the policy’s intended impact, and is primarily focused on disambiguating and identifying beneficial owners. This report presents findings from desktop research conducted in early 2022, informed by consultations with civil society and public sector organisations. The research found that personal information explicitly collected about beneficial owners of companies through BOT does not include sex-disaggregated data in the majority of implementing countries.[5] Nevertheless, the research showed that sex data about a beneficial owner is available implicitly to most governments as part of BO declarations, and governments often already hold sex information about individuals in existing datasets, which can be integrated with BO data.

This report subsequently considers whether there is an added benefit of collecting sex-disaggregated data, the potential use cases of this data, and the potential value and risks of publishing this data. Whilst additional research will lead to a better understanding of this nascent topic, this report includes the following findings:

• A small number of countries explicitly collect sex-disaggregated BO data through declaration forms, although there is often no (published) rationale for this.
• The collection of sex data may help to better identify and disambiguate between the beneficial owners of companies in some contexts (for example, where there are limitations on access to individual identification documents).
• Sex-disaggregaged BO data may be able to help advance gender equality policies, such as preferential treatment in public procurement.
• Governments may be able to use sex-disaggregated BO data to draw insights into women’s contributions to the economy, especially when the data is considered in conjunction with other aspects of women’s enterprise.
• Sex-disaggregated BO information may help improve efforts to monitor, develop, and foster gender-responsive policymaking within high-risk industries, such as extractives.
• Processing sex-disaggregated BO data for gender equality purposes expands the initial scope of BOT reforms, which may require a re-assessment of whether the added value is proportional to the risks as well as putting in place new measures defining when and how to collect, use, and publish sex-disaggregated BO data.
• Data about gender or biological sex is treated differently in law by data protection legislation, and whether it is sensitive or special category data will determine the proportionality threshold for processing it.
• There are limitations to using sex-disaggregated BO data for gender equality policy aims, which include potential issues with data accuracy and reliability, and the fact that the data only offers insights into the needs of a segmented and select group of women, namely, those whose ownership is formalised.

Considerations for policymakers

Neither the potential negative nor positive impacts of collecting and publishing sex-disaggregated BO data are well established. Therefore, a cautious approach to collecting, using, and publishing gender data as part of BOT disclosure is warranted. Common data protection and privacy standards limit the collection and processing of more data than is strictly necessary (data minimisation). Where sex-disaggregated BO data is determined to be relevant for BOT or gender equality policy, the purpose and justification for using, collecting, or publishing will likely need to be established and publicly documented.

Whilst implementation contexts vary widely, the research findings in this report give rise to the following general considerations for governments, as they exercise their discretion in implementing BOT and gender equality policy reforms:

• BOT policies can be gender responsive in their approach, even if they do not seek to promote gender equality as a primary aim. A gender-responsive approach implies that risks of potential harms associated with the collection and processing of gender information should be assessed and mitigated where possible, even if not required under data protection legislation.
• Governments need to define a clear legal basis and purpose for the collection, processing, and publication of sex-disaggregated data on beneficial owners, and establish that the risks of doing so are proportionate. This is particularly relevant for publication, given concerns about risks of personal harm with respect to the publication of personal data as part of BOT.
• Implementers should consider whether it is possible to mitigate risks to personal harm whilst achieving the stated purpose of publication. Approaches include anonymising or pseudonymising data, implementing protection regimes, or limiting access to sex data to those demonstrating a legitimate interest.
• When defining ownership, management, and control in gender equality policy, lower thresholds may help capture a more comprehensive image of women’s ownership. Implementers should consider whether the thresholds for BO disclosure are set sufficiently low to capture the required data.
• If jurisdictions that collect and process sex data as part of BOT policies document and publish information about using the data, this would enable additional research on the gendered dimensions of BOT. These jurisdictions’s experience may then be able to help identify additional use cases and expand on the specific value sex-disaggregated BO data may have to further gender equality.

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