The Internet is increasing accountability and transparency not only among businesses, but also governments, according to John Gage, Sun Microsystems' chief researcher and director of its Science Office.
Gage participated in a panel discussion on transparency and accountability in the Internet economy at the World Economic Forum held in Melbourne on Tuesday.
Gage says that IT and the Internet are particularly important in helping governments deal with corruption.
"In countries where corruption is endemic, the costs of corruption are passed on from the government to everyone, including the poor. Corruption in the forms of incorrect fines that traffic police collect and the duties that customs officers charge on goods entering their countries have been impossible to monitor until now."
Governments need to push for more disclosure of their internal operations, and the Internet is a vehicle to help them do this, Gage says.
"The Internet can make government transactions and procurements visible. It will make public information on how governments' internal systems are using funds, what they are buying and how much they are paying for it. The Internet will enable governments to not only become more efficient, but to deal with corruption."
The Internet will also have a big impact on the financial regulation areas. The US has a Governmental Accounting Standards Board which establishes standards of state and local governmental accounting and financial reporting, and a Financial Accounting Standards Board which seeks to improve standards of financial accounting and reporting for the guidance and education of the public. Financial reports from the government and the financial sector are increasingly being made available on the Web.
Aside from governments, the Web is also making business operations more transparent to investors and employees. For example, in the US every public company is required to disclose critical business, financial and competitive details of their activities to the Securities and Exchange Commission (SEC).
Investors in the past have had to pay $US50 for each page of information they receive about their investments and the company they have investments in. But with the Web, they can access this information on company websites as well as commercial information services like EDGAR Online.
Gage also cites a private site, Webb-site.com, which reports on Hong Kong companies' business activities. Run by David Webb, a former investment banker in Hong Kong, the site aims to increase the transparency and efficiency of free markets and their participants, including companies, governments, regulators and controlling shareholders, and promote the participation of minority shareholders in corporate decision-making.
For companies that are operating across several countries, the Internet also gives them a common platform of reporting across different countries.