The UK Financial Reporting Council (FRC) has identified in its latest annual review several areas in which companies are falling short in reporting against the UK Corporate Governance Code.
“Many of the trends observed last year remain,” the report said. “There were instances of unexplained departures, with the focus of reporting being solely on the company’s timeline for compliance, as well as instances of boilerplate reporting lacking the detail required to effectively convince the reader that the departure from the code benefits the company.”
Few companies reported to a “consistently high standard”, an FRC news release said. Although risk assessment and internal controls have been a focus over the past year, little improvement was seen in the quality of reporting in these critical areas.
The release noted that, although the review focuses on many areas of concern, the FRC was encouraged by an increased focus on workforce engagement and stakeholder reporting.
In the release, Mark Babington, the FRC’s executive director of regulatory standards, cited progress by companies in providing transparent and insightful disclosures, but he said more work is needed to provide “genuine insights into governance outcomes and actions”.
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