The American Supreme Court judge Louis D. Brandeis, pictured, famously observed that "Sunlight is said to be the best of disinfectants; electric light the most efficient policeman". His words have been widely quoted in the UK within the past weeks against the background of the Daily Telegraph's disclosure of MPs' expense claims. It is, however, interesting to note that Brandeis' observations were made in the context of banking reform and were published in his 1914 book Other People's Money (having appeared earlier in Harper's Weekly). His book is well worth rereading; others make this point more forcefully than me (see, e.g., here).
Away from banking and America, Brandeis' words were cited in the company law case Clark v Cutland [2003] EWCA Civ 810 by Lady Justice Arden. Her Ladyship provided the following explanation of the role of disclosure (para. [21]):
Disclosure is required for many purposes and it performs at least two valuable functions. It ensures that information is passed from the directors to the shareholders or from one director to another. It also acts as a deterrent against self-dealing. As Brandeis J ... said extrajudicially, "sunlight can be the best of disinfectants". Meaningless disclosure does not perform these functions and inadequate disclosure is often little better than no disclosure at all".
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