ICAS raises directors' liability concerns
Protection for directors over forward-looking statements could cause other problems, warns ICAS
ICAS has raised concerns that the proposal to give directors only limited
protection when making forward looking statements could discourage companies
from providing material elsewhere in their annual reports.
The Scottish institute welcomes the draft clause included in the company law
reform bill regarding directors’ liability, but warned that giving protection
aginst just ‘the directors’ reports’ and ‘the directors’ remuneration report’
could discourage the production of other material in company reports.
‘It would be a retrograde step inadvertently to force companies to curtail
their narrative reporting to the directors’ report and the directors’
remuneration report,’ said Isobel Sharp, ICAS VP and Deloitte partner.
‘Separate specialist reports on community and environmental matters and the
OFR itself have become a feature of many annual reports. The institute’s
amendment seeks to build on this trend so that companies have flexibility in
structuring their reports to meet users’ needs.’
Yesterday CIMA backed the ‘safe harbour’ provisions. Chief executive Charles
Tilley said that the protection was ‘vital’ to ensure directors could make
forward-looking disclosures.