Every industry with public responsibilities has specific disclosure rules that are used to ensure that essential information is made available to those who are permitted to obtain it. There are four types of disclosure rules: financial, conflict of interest, reporting and legal. The public interest in disclosure rules increased dramatically after a series of accounting and business scandals that highlighted situations in which business and political leaders were motivated by their own interests instead of the interests of the voters or shareholders.
Financial disclosure rules are in place for many political leaders and publicly traded companies. In countries where it is required, every politician is expected to disclose all sources of income, payments received through contributions to his or her campaign for election and all investments. The purpose of this requirement is to remove any potential for actions that benefit the politician directly. Publicly traded companies must disclose the nature of financial investments, payments, bribes and fine payments in their annual financial statements. This information allows shareholders and investors to make informed decisions about the stability and profitability of those companies.
Conflict of interest disclosure rules are found in all areas of governance, in both the public and private sectors. Executives and leaders are expected to remove themselves from situations in which they personally stand to gain. For example, a governor with significant campaign contributions from the tobacco industry must disclose this, declare a conflict of interest and excuse himself or herself from a discussion of tobacco industry regulations. Failure to follow these rules is a professional risk for the leader, because he or she is now open to charges of breaching governance rules and might be dismissed.
Reporting disclosure rules are becoming increasingly common in the international media. Organizations such as the BBC® require all reporters to inform viewers of any relationship between the parent company or advertisers and the subject of a story. For example, during the financial crisis in the fall of 2008, reporters were required to state the relationship between various financial companies and the BBC®. These types of disclosure rules help viewers put comments and suggestions made by the reporter into context and help avoid the appearance of a conflict of interest.
Legal disclosure rules are set into common law and clearly define what information must be shared with the prosecution and the defense teams. The purpose behind these rules is to avoid wasting time establishing facts and to provide each side with the opportunity to dispute or counter evidence presented by the opposing side. Failure to follow these disclosure rules is cause for an appeal and could result in discipline for the lawyers involved.
