Governance judges say Awards highlight areas for improvement
There is room for improvement in corporate reporting amongst FTSE companies, according to a report.
Based upon the findings of the 2009 ICSA Hermes Transparency in Governance Awards, the report highlighted several common observations of the judges.
In terms of general quality of disclosure, the judges observed that some top FTSE 250 companies performed better than their FTSE 100 counterparts. It was also noted that companies in more sensitive or controversial business activities provided better explanations.
The quality of reporting varied tremendously within individual reports. For example, the remuneration report might be excellent, but other areas could be relatively poor.
The ICSA suggested that companies consider why this is, and how it could be avoided.
In comparison, some newly or recently-listed companies showed a refreshing tone of openness and communication, said the report.
“The judges and I were left in no doubt that some companies were making a significant effort at engaging with their stakeholders on governance issues,” said Sir John Parker, Chairman of National Grid and Chair of Judges for the ICSA Hermes Transparency in Governance Awards.
“We believe that transparency and accountability generates trust and confidence with stakeholders. This is particularly important in the current climate in which all of us in business need to rebuild trust with society.”
“Good disclosure gives great visibility of companies’ brands, their ethos, and values as well as the competence and ability of the board,” he added. “The best disclosure demonstrates that good governance is a business enabler and the best companies demonstrate that governance is truly embedded in the company and is not regarded as a compliance exercise to be completed once a year for the Annual Report disclosure under the Combined Code.”