Reacting to the report, CBI deputy director general John Cridland, warned: ‘The current regime needs modernising.
‘However any changes must allow firms to operate as freely as possible. So we want changes in company law to strike a balance between encouraging business growth and securing an appropriate degree of accountability,’ he added.
The CBI supports the ‘Think Small First’ approach and the development of a Model Constitution imposing a minimum level of acceptable regulation for small companies.
It also favours an inclusive approach to directors’ duties – where the board is primarily accountable to the shareholders as the owners of the business, but has regard to the interests of employees and other stakeholders.
However, it warned the Operating and Financial Review has been a success but should not be made a statutory requirement as it could lead to standardised statements.
Meanwhile, Small Business Service chief executive, David Irwin, said he warmly welcomed the proposals.
He added: ‘Many small companies find the existing mire of regulations difficult to fathom and costly to implement – and this prevents them from achieving their full potential.
‘These proposals would remove many of the current frustrations and create a positive environment for enterprise and growth.’
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