London, 6 May 2016 – Companies consider reputational damage resulting from association with something like the Panama Papers to be more of a deterrent than a fine according to the results of a poll by ICSA: The Governance Institute and company secretarial recruitment specialist The Core Partnership. Of those surveyed, 61% said ‘yes’ reputation would be more of a deterrent, 34% said ‘maybe’ and only 5% said ‘no’.
Despite this fear of reputational damage, not all companies consider that their working relationship would be affected if a company they worked with had connections to one revealed to be involved in the Panama Papers leak, with 8% saying that their working relationship would not be affected. Some 24% of respondents did think their working relationship would be affected and 67% said ‘maybe’.
The Core Partnership polls the views of company secretaries, who have privileged insight into the boardroom, with regular monthly surveys in conjunction with ICSA, the professional body for governance. This poll, which was carried out shortly after the story of the Mossack Fonseca leak broke, found the following:
“The line seems to have blurred between people’s understanding of tax avoidance, which is legal, and tax evasion which is not,” says Peter Swabey, Policy and Research Director at ICSA: The Governance Institute. “From a governance perspective, companies should always work within the law, but certain situations require a bit of additional soul searching in terms of what the right thing to do is as opposed to what is purely legal. What is morally acceptable can change over time and may differ according to sector, but the governance litmus test should always be ‘Is what we are proposing the right thing to do?’ It comes down to the culture and values of an organisation, but educating people to obey the spirit rather than the letter of the law needs to start early in life.”
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