Researching Corporate Structures

How are corporations structured?

Companies that operate harmful projects are often part of larger corporate groups. A corporate group may contain many companies that are organized like a pyramid. At the top of the pyramid is the parent company. Beneath the parent company are one or more subsidiaries, which the parent company owns and controls. There might be a chain of many subsidiaries separating the parent company from the project that is causing harm. Understanding this structure is an important part of Follow the Money research.

Why is it important to identify parent companies?

In many cases, subsidiaries are established for the sole purpose of developing or operating a project. They are normally based in the same country as the project. These subsidiaries may not have much decision-making power, may not have much money and may be unknown outside of the local area where the project is being developed. If you want to understand where the decision-making, financial and reputational power of a corporate group lies, you must uncover the parent company.

The parent company is responsible for:

Decision-making: The parent company makes the big business decisions for the corporate group. Its key decision-makers are found in two bodies: management, which includes the company’s CEO or president; and the board of directors, which oversees management’s decisions.

Funding: The parent company is likely a major source of funding for the group’s operations. The parent company raises money from shareholders, lenders and other investors. It then uses this money to fund the group’s operations, including the harmful project you’re researching.

Reputation: The parent company may have a reputation to protect. It may also be a member of environmental and social frameworks or sustainability bodies, such as the Roundtable on Sustainable Palm Oil, which has a complaints mechanism.

Providing information to the public: If the parent company is publicly traded, it must disclose certain information about the corporate group’s operations — including the project you’re researching — to the stock exchange where it is listed.

Why is registration information important?

All companies must legally register in the country, state or province in which they are based. Understanding where the parent company and its subsidiaries are legally registered helps determine which laws apply to it — and which laws the harmful project might be violating. This information can be critical for informing your advocacy strategy, including potential complaints to non-judicial grievance mechanisms or the courts in a particular jurisdiction. For more information, see:

If a subsidiary — or more likely its parent company — is registered in a member country of the Organization for Economic Cooperation and Development (OECD), this opens an important pressure point for advocacy. Companies based in OECD member countries should follow the OECD Guidelines for Multinational Enterprises. OECD countries have National Contact Points, where people can file complaints for violations of the guidelines. For more information, see:

How do you research corporate structures?

The following sources are useful for researching corporate structures:
  • Company disclosures: If a company is publicly traded, it must regularly disclose important information about itself to the public, including subsidiaries and names of people in management and the board of directors. Companies regulated by the U.S. Securities and Exchange Commission disclose their subsidiaries on Form 20-F, which can be searched for here. Public companies also commonly disclose their ownership stakes in subsidiaries and their countries of registration. Sources such as annual reports and offering prospectuses can shed light on corporate structures. These documents can be found on the websites of the relevant stock exchange, the relevant financial regulatory body, or the company itself. Company websites also sometimes contain this information (look for “About” or “Corporate Structure” tabs).
  • Corporate registries: Many countries require companies, including subsidiaries, to register with a government agency. (In the United States, companies register with state governments.) These agencies often maintain websites where company registration documents can be accessed by the public, sometimes for a fee. This can help establish where a parent company or subsidiary is based. OpenCorporates is a great starting point for these searches, because it aggregates data from many corporate registries from around the world. However, it does not have access to data in every country, so it may be necessary to go directly to the corporate registry you need. The Follow the Money Toolkit lists some country-specific databases for finding corporate registrations.
  • Internet searches: Use Google or other search engines to research corporate structures. Searching for the name of the subsidiary developing the project, along with key terms like “parent company,” “subsidiary of,” or “ownership,” can help establish links with a parent company and corporate group. Similar searches can be done to establish the identity of management and board members. For advice on using Google, see here.
  • Offshore Leaks Database: Many corporate groups establish subsidiaries in countries known as tax havens, which have low taxes for businesses. The International Consortium of Investigative Journalists maintains a large searchable database of companies registered in tax havens. The information in this database comes from a series of leaks to journalists since 2013. The database is not exhaustive, however. So even if you don’t find the company you are looking for, it could still be registered in a tax haven.

USEFUL RESOURCES

OpenCorporates company registration database

ICIJ Offshore Leaks Database

Follow the Money Toolkit