The dog ate my work!

THE FINANCIAL REPORTING COUNCIL (FRC) said a minority of companies are failing to give proper explanations, in their annual reports, as to why they haven’t complied with the UK’s voluntary corporate governance.

The FRC examined about 60 UK annual reports as part of research into the “comply or explain” principle. It found companies’ explanations for not following the code were, as “sometimes rather perfunctory”.

So what does the UK’s accounting and corporate governance watchdog plan to do about the corporate governance laggards? Fine them? Or perhaps, if corporate governance is so important, the UK code should be made mandatory?

The FRC prefers a gentler approach – merely suggesting that it plans to define what counts as a decent excuse for ignoring corporate governance rules. That’ll have board directors quaking in their handmade loafers …

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Fiona Westwood of Smith and Williamson.