Introduction
Welcome to Wales and to Cardiff - to this cosmopolitan city which owes its very existence to international trade, in coal and steel, and its special character to the men and women who settled here from all parts of the globe.
Business registration, as I shall try to make clear, is a subject which is now an international one.
Significance of registration
The registration of companies, to the world at large, is not a topic that often crops up in conversation. It is something that just happens. That is how it should be. And it is the task of the people in this room today to ensure that that is how it is.
The job of registration authorities throughout the world is not usually a high-profile one. Unless, that is, things go very wrong ñ and some of you will know of such disasters. Your task is simply to provide an efficient service to the business community. Not that it is in practice always a simple task. I hope discussions at this conference will help each of you in that task.
Business environment
Governments everywhere are concerned with economic development, which means encouraging business and promoting investment. It is, of course, ultimately businesses ñ and not governments ñ that create strong national economies. But governments can create the environment in which businesses can operate effectively. Registration bodies are an integral part of this environment.
Better regulation
If governments are too heavy-handed in regulating business activity, this is a disincentive to entrepreneurial initiative. This is one of the reasons why the British government, amongst others, has concentrated so much in recent years on removing unnecessary regulations.
But not all regulation is bad. We have laws to help and protect the people for whom we have responsibility. None of us wants to do anything to encourage either criminal or simply reckless activity ñ and the public could well be at as great a risk from incompetence as it is from deliberate fraud. In fact, the one can often lead to the other.
It is unrealistic to think that - except in very rare cases - we can identify rogue companies at the outset. Arguably, there is no such thing as a rogue company anyway. There are, of course, rogue individuals who exploit companies for unlawful purposes. And there are incapable individuals who should not be entrusted with the management of companies.
These we should seek to identify. Those who come before the courts may be disqualified from acting as company directors. In Britain, the register of disqualified directors is now freely available on the Internet.
And in other cases, a track record of failed or poorly performing companies should be a warning to others. Here it is the responsibility of the registration authorities to put relevant information in the public domain.
Business and consumers
My particular role ñ with ministerial responsibility both for consumers and for corporate affairs ñ means that I have to recognise the need to balance the requirements of different sectors of the population. I want to make life easier for businessmen by removing administrative obstacles, but I do not want consumers exposed to unnecessary risks.
This does not mean a 'nanny state'. It means an environment where people can behave responsibly. I don't want either businessmen or consumers to be restricted in their choices. I want them to be able to make informed decisions.
Information about companies is key to this. If businesses are to have the benefits of incorporation ñ and particularly if those who invest in them are protected by limited liability ñ it is only reasonable that they should be open about what they are doing. This is part of the deal.
How much information and how it should be distributed is something you will be considering here today. There is a fine balance to be struck.
Human Rights
This week, the European Convention on Human Rights has become part of British domestic law. The Human Rights Act will allow cases concerning the rights given under the Convention to be brought in the UK courts.
The government hopes that the Act will help to create a society in which the rights and responsibilities of individuals are properly balanced and in which an awareness of the Convention rights permeates our governmental and legal systems at all levels.
The Convention is obviously concerned with the rights of the individual, but also with the relationship between the citizen, his and her fellow citizens, and the state. Company law too is about the relationship between citizens and the state.
Only the state can offer the benefits of incorporation - something which it does where it sees advantage to the citizens as a whole in doing so - and it must do so fairly, objectively and responsibly. The rights of the individual must be balanced against the rights of the rest of mankind. We need to take account of the rights of the individual to a degree of privacy and protection - and fair treatment in the case of court action - while not ignoring the needs of the community as a whole.
Company Law Directives
Determining levels of disclosure by companies and their directors is an area where we have been pleased to be part of the development of European standards. The European Company Law Directives ñ which are on this morning's agenda - underpin relevant legislation both in Britain and throughout the European Union. They also provide guidelines as to what is expected of countries in the course of accession to the EU ñ and to other countries who are reviewing their company law and the way in which their registration bodies operate.
The development of standards is of course not a one-off exercise and we can expect an active debate on updating the Directives.
Consultation
Getting the law right is never easy. Otto von Bismarck said that to appreciate either sausages or the law, you should not see either in the making. But we do need to be involved in the making of the law ñ however messy the process may be.
The law exists to serve the interests of the people. It may be that in the past people have just accepted the law - willingly or grudgingly. These days - certainly in Britain, the people expect to be consulted about new legislation.
The way of making law has changed and I am sure that you can expect the word 'consultation' to come up several times during the course of this conference.
Our consultation ranges from issuing papers on specific topics to publishing draft legislation - accepting, of course, that the text might well change either before or after it reaches Parliament. Both the government and Parliament take the consultation process very seriously.
Consultation is about admitting that we do not always know best. That applies to governments and to anybody who is involved in the process of change. One thing that unites everybody here is that we are all involved in change.
Change ñ the law
Change may be necessary as a result of inadequacies in existing law or procedures. In Britain, the legacy of company law dating back to the nineteenth century is both a strength and a burden.
We have to accept that the character of business and the types of company have changed over the past 150 years. A law written in the context of a relatively small number of public companies is not best suited to today's register.
We still have big companies - in fact, much bigger ones - but the greater part of the register consists of smaller, owner-managed businesses. Even so, these are businesses which take advantage of corporate status and limited liability, as - unlike some other countries represented here - we do not require registration of unincorporated businesses.
Company Law Review
In March 1998 my Department launched a long-term fundamental review of core company law with the aim of developing a simple, modern, efficient and cost effective framework for carrying out business activity in Britain for the twenty-first century. It is an indication of the seriousness with which we regard this - and the need for widespread consultation - that we have scheduled 3 years for the Review. The report is scheduled for the Spring of 2001.
And that, in a sense, is only the beginning as we will then be considering what new legislation is needed.
I know that other countries have been following the Review with interest and am pleased to see that it is on the programme for this conference.
Change ñ technology
Change may also be necessary to take account of the driving force of technological advances.
A computer database offers many advantages over paper records, particularly in enabling wider and easier access to relevant information. The sophistication and speed of computer services, with the improvement in telecommunications, has offered up the possibility of using both data and digital images.
A particular area of interest has been the development of electronic filing facilities. In the short term, the idea of a government body receiving information electronically has given rise to various legal and practical problems, but it is the way of the future and clearly of great interest to this conference.
Also, we must recognise that the Internet, not so many years ago the preserve of technocrats, is now an everyday part of business life in Western Europe.
Modernising Government
As part of our Modernising Government agenda, we have set a target that 50 per cent of dealings with government should be capable of electronic delivery by 2005 - and 100 per cent by 2008.
The Government will link the widest possible range of government services and information through electronic government gateways or portals. We will also benchmark progress against targets for electronic service delivery, and against the best performance in the private sector and in other countries.
Modernising Government is a long-term project, which will transform the face of public services, putting citizens first by ensuring public services are accessible to all. Companies House has been amongst the leaders in making this happen.
The Internet ignores boundaries
One of the features of the Internet is that it ignores national boundaries. It is as easy to access the Companies Registry in Hong Kong as another site in Britain. Registries throughout Europe have been developing web sites. The European Business Register - developed over the past decade with the support of the European Commission, and now functioning on a commercial basis - also tackles the issues of language and standard formats for information.
Those registries who have moved into electronic media have few doubts that this is the way forward. Britain is moving fast, providing a considerable amount of free company information on the Companies House public access web site.
Sales on the Web
And I am pleased to announce that this month Companies House is launching a facility to purchase latest company accounts and annual returns on its web site using payment by credit card. This new facility is designed to provide infrequent users of information with electronic access to key company documents and to offer them an electronic alternative to using microfiche.
For regular information users, Companies House will continue to develop its online subscription service, Companies House Direct, which offers electronic access over the Internet to a broader range of company data and documents.
Differing practices
The law, registration practice and means of providing access to information differs from country to country, sometimes for good reason, sometimes little more than an accident of history.
Registration may be the responsibility of a Ministry of Justice, of Finance or of Trade, of Enterprise or Investment. It may be handled by a separate Agency. It may involve Chambers of Commerce. It may involve local or regional government. Some of the functions may be contracted out to commercial organisations. The permutations seem endless.
Best practice
But these differences should not prevent us from seeking out best practice. The concept of benchmarking is very relevant in modern management thinking. This is an opportunity to identify and learn from best practice in organisations with similar aims and responsibilities to our own. Let us benefit and learn from best practice, wherever that best practice may be found.
The readiness of those involved in registration activity across Europe - and from further afield ñ to share their experience is an encouraging sign for those involved in the promotion of business, investment and economic development.
Forum
I note that, during the conference, you will be considering a proposal for a Forum of European Commercial Registers with a view to ensuring that the work begun here continues after everyone has gone home. A conference such as this is not an end in itself, but a means of enabling each country concerned to provide the most effective service to its own business community.
International business
In providing a service to its own business community, each country is in fact helping the development of international business activity.
Business is becoming increasingly international. No longer is it sufficient to know about businesses in the immediate locality or even the same country. Businesses throughout Europe ñ and beyond ñ look to you as the primary sources of information on companies they want to buy from, sell to, invest in, or co-operate with in some way.
Failing to respond in a meaningful way would be failing not only the customers seeking information, but also those domestic companies or businesses which would be deprived of opportunities. But the whole point of your presence here is that registration bodies in all the countries represented at this conference are determined to provide a quality service in support of business.
Each country needs to get the right combination of law, procedures and systems to provide an effective service in the context of its own situation. I hope that this conference helps each of you to develop your own ideas.
Opening of conference
I wish you every success with your discussions and in acting on what has been discussed here.
I have pleasure in declaring the conference open.