Stephen Haddrill responds to Commission Recommendation on the quality of corporate governance reporting
News types: Policies and Responsibilities, Policy Statements, Speeches, Statements
Published: 9 April 2014
“The FRC welcomes the release of the Commission’s Recommendation on the quality of corporate governance reporting (‘comply or explain’). The FRC supports the Commission’s assertion that an effective corporate governance framework plays a key role in contributing to growth, stability and long-term investment, and recognising the concept of ‘comply or explain’ as a truly European mechanism.
The FRC advocates the concept of comply or explain as a key feature of European corporate governance structures and one which the FRC champions through the UK Corporate Governance Code. A European corporate governance framework will assist companies in how they report and help investors better to understand the companies in which they invest.
The FRC endorses the Commission’s focus on explanations. There will at times be legitimate reasons for departures from the requirements of corporate governance codes, but such departures must be considered and well explained. In this context, the FRC considers that outlining the elements required for explanations may be helpful in encouraging better reporting. The focus on the company’s specific characteristics and situation and ensuring clear, accurate and comprehensive explanations will ensure that investors receive the information they require.
The FRC shares the Commission’s views on the importance of good quality corporate reporting and believes this recommendation will help to enshrine good corporate governance throughout Europe.”