Companies are failing to communicate effectively with investors on how their organisations are governed, potentially raising questions about the quality of board oversight, according to a report by PwC UK, CIMA and communications consultancy Radley Yeldar.
The report, Corporate Governance: Simple, practical proposals for better reporting of corporate governance, favours integrating governance with the company’s personal strategy, performance and prospects rather than with a regulatory compliance approach.
PwC UK corporate reporting director Mark O’Sullivan said too much reporting is aimed at fulfilling legal requirements rather than enlightening the reader. “With an integrated approach to reporting, organisations can turn governance documents into real communication that easily engages the reader with the information that they need,” he said.
CIMA head of corporate reporting Nick Topazio added: “Regulation can go so far in highlighting important areas of reporting but real improvement in the quality and relevance of information in company reporting, is about the commitment of the company, not checklists.”
The report said that investors should be provided information on quality in addition to views on the market environment, strategic priorities, risk management and the business model.