Open Expense Reports Make For A Healthier Company
Friday, March 30th, 2007Tom Parkinson, CEO of Hydro One in Toronto, stepped down recently:
Parkinson, who pulled in $1.69 million in 2006, quit in December after an auditor’s report raised questions about expense claims he billed to Hydro One, the giant transmission utility.
A simple solution would have prevented this: open-book expense reporting. That is to say, making all expenses public to the whole company, like Linden Labs does:
If you travel you have to send an e-mail to everybody that says how much you spent and why it was worth it.
Public accountability puts a lot more pressure on your people to spend money in productive ways, and make it nearly impossible to abuse the system.
I don’t have a data point for this, but I’m also willing to bet that it also lowers the overhead on your accounting division, as there’s a reduced need to hire people to scrutinize every single expense report for abuse.