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Corporate governance and reporting serving vested interests rather than benefiting the public
Theme paper for global convention questions whether governance and reporting requirements are becoming overly complex and reflecting vested interests rather than the needs of businesses and their stakeholders
The professor calls for balanced assessment: “Might the effectiveness of boards and corporate performance have improved more if the additional time and resource had been devoted to traditional director, board and business development?
The theme paper questions the direction of travel: “Is governance improving or just changing? Is it becoming more complex like financial reporting? Are boards more relevant and vital? Are they better informed and more effective? Are more corporate policies being implemented?
Coulson-Thomas also asks: “Where is it all leading? Will a web of governance and sustainability codes, regulations, laws and policies impose further costs on business, inhibit responsible risk taking, reduce diversity and stifle innovation? Will board members become so concerned with compliance and playing it safe that they slow progress and end up afraid of their own shadows? Will the default position be a no vote against anything that appears unfamiliar or different?”
The Professor argues that cost and unintended consequences should not be ignored: “Sometimes the vested interests in additional requirements are easier to identify than the 'customers' who might benefit from them. Producing ever more lengthy, detailed and complex accounts on grounds such as “improving accountability”
Reporting requirements and, in particular, integrated reporting will be considered at the convention. Coulson-Thomas asks: “If national and international requirements are not to lead to longer and more complex reports and accounts what can be done to reduce the 'clutter'? One might debate whether taken as a whole an annual report is fair and balanced, but are the weighty tomes produced by some companies understandable to most of the shareholders receiving them? What happened to relevance, economy, simplicity, proportionality, adaptability, flexibility and diversity?”
The theme paper questions the relevance and applicability of contemporary arrangements:
Coulson-Thomas questions whether customer or vested interests are being served: “Who are the 'customers' of governance, sustainability and reporting requirements?
The theme paper issues a warning and a challenge to boards: “If shareholders, boards and other business interests do not respond to consultations on governance, sustainability and reporting and/or comment upon proposals and developments in these areas they should not be surprised if what emerges reflects interests other than their own. So what should a board do in order to lead and develop approaches that are appropriate for the situation it is in, the challenges and opportunities it faces and the interests of a company's stakeholders?
The forthcoming London Global Convention “Boards to Lead: Effective Corporate Governance and Sustainability”
The theme paper “Boards to Lead: Effective Corporate Governance and Sustainability”
Prof. Colin Coulson-Thomas, a member of the business school team at the University of Greenwich and Chairman of Adaptation holds a portfolio of board, public and academic appointments and has helped companies in over 40 countries to improve board and corporate performance. Author of over 50 books and reports he has held professorial appointments in Europe, North and South America, the Middle East, India and China. His latest books and reports are available from http://www.policypublications.com.
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Page Updated Last on: Jul 24, 2014