Corporate Reporting Governance Forum event December 2019

Tue 10 Dec 2019

Mazars and the Quoted Companies Alliance welcomed over 50 Finance Directors and board members of AIM quoted and smaller listed companies across the UK for our annual year-end update.

Much of the discussions focused on corporate reporting and it was interesting to hear that while most boards appreciate the importance of narrative reporting, they also admit they don’t feel they are doing enough. Other highlights from these roundtable updates include:

• 89% of the 927 AIM companies at the end of 2018 chose to adopt the QCA Corporate Governance Code and in doing so 42% of a sample surveyed said it had helped them to formalise new processes and 40% said it had led them to disclosing more information than previously.
• There has been a substantial growth in investor interest in ESG issues recently and AIM,, as well as companies listed on the Main Market, will need to take account of this in their governance and reporting.
• Boards need to ensure they have a good understanding of the culture of their business – this is very definitely about it being ethical but also about whether it is team or individually orientated, how focused it is on innovation and the attention paid to other stakeholders as well as employees.
• Effective risk management is also high on the boardroom agenda with emphasis on areas such as cybersecurity, not allowing the business to get out of date and ensuring effective crisis management preparations are in place and tested.
• There are additional disclosure requirements for some fully listed companies in relation to CEO’s pay and the effect of share price movements on directors’ remuneration.  Many companies will have to start reporting on application of their responsibilities under s172 of the Companies Act on employee, customer and supplier engagement this year, both at group and subsidiary level.  Energy and carbon reporting requirements come in for many private companies from years starting after 1 April 2019.
• The FRC published its Annual Review of Corporate Reporting 2018/2019 in October with helpful guidance for audit committees and FDs, as well as auditors, on areas for focus based, in particular, on the results of its monitoring work.         

A special thank you to Tim Ward, Chief Executive of the Quoted Companies Alliance and Dick Steele, QCA Director and Chair of Portmeirion Group for their contribution to the series. A debrief will be published soon.