Research
Grant Thornton calls for less repetitive corporate disclosures
While compliance with the Combined Code has improved,
Grant Thornton, in the accounting firm's
corporate governance review of 2006, said it would like to challenge company
directors to resist the temptation to merely repeat disclosures provided
previously.
In the review of the governance disclosures of 314
companies in the FTSE 350 only 31 could be considered fully compliant with the
Code, Grant Thornton said, although in fact 34% claimed full compliance - an
increase of 28% in 2005.
Of the 90% of companies not considered compliant by Grant
Thornton the majority had provided explanations for their non-compliance. The
report noted that 96% of companies were providing some explanation of their
non-compliance, an increase from 91% last year.
In assessing these explanations, however, only 32% of
companies had made any significant change in their disclosure between 2005 and
2006 and 57% had made no change at all. Meanwhile, in the area of risk and
internal controls only 38 companies, Grant Thornton found, gave more than the
bare minimum disclosure.
The most significant area of improvement was in disclosure
of board accountability. The review found that 28% more companies in 2006 than
in 2005 provided extra detail on the work of the nomination committee, including
the process used for board evaluation. In 2006 70%, a 20% increase on the
previous year, provided a statement that the non-executive directors conduct an
annual performance appraisal of the chairman.
Links
Grant Thornton
Corporate Governance Review 2006
January, 2007 |
