PwC UK has found FTSE 350 corporate reports are falling short of new compliance requirements as well as emerging practice and stakeholder demands.
PwC assessed that only half of the 350 clearly communicated their business models, as set out by this year’s updated requirements to the UK Corporate Governance Code.
Charles Bowman, senior corporate reporting partner, PwC warned that companies that fail to report successfully may risk falling behind the enforced changes and lose investor trust. PWC also deemed that only 34% of companies surveyed clearly explained the activity of their boards and committees.
Despite 78% of companies suggesting that their key performance indicators are linked to executive remuneration, PWC judged that the reports of only a quarter of the 350 companies were adequate to for readers to be able to make a direct link between the performance outcomes of the business and how management were rewarded.
“We have seen some companies make great strides in their corporate reporting and that is to be commended. However, there is massive room for improvement. The last thing businesses or capital markets need is the risk of an overnight loss of trust from unseen issues. Just because it doesn’t feature on the balance sheet, it doesn’t mean trust can be overlooked,” Bowman said.