Following publication of the combined code by the Financial Reporting Council on Wednesday – generally well received all round – KPMG said many of the provisions set out in the Higgs report had been converted into corporate governance principles, requiring narrative explanations.
The firm said there were only 14 areas, which qualified as principles in the original code, with the Higgs report adding just one more.
But, it said, the FRC had ‘greatly increased’ the number of new principles so that the new code includes 14 principles and 21 supporting principles, meaning that companies will have disclose ‘pages more’ in their annual reports.
‘Transparency should always be welcomed, but we have to ask whether so much governance disclosure will provide real and commensurate, benefits to investors,’ commented Timothy Copnell, director of corporate governance at KPMG.
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