Companies still struggling to comply with Combined Code

Only a third of listed companies in the UK are complying fully with the FRC’s
Combined Code on corporate governance, according to new research from Deloitte.

The Big Four firm analysed the annual reports of 130 listed companies and
found that while the number in full compliance has risen compared with last
year, still only 35% of companies were able to say they were following the
guidance fully, with the rest explaining why they did not in the report.

Compliance was even lower in smaller listed companies, with only 18% fully in
line with the Code, highlighting the burden it places on businesses.

Other findings included:

Just four companies had complied with the ASB’s Reporting Statement on
operating and financial review;

Nine companies had received modified audit reports, seven of which related to
going concern;

The length of the annual report has increased by 41% compared with 2005.

Isobel Sharp, audit partner at Deloitte, said: “Companies have performed
better in 2009 than in 2008 in meeting the disclosure demands which are diverse,
disjointed, different and dysfunctional. Businesses would be helped if there was
a single authoritative document which brought together the requirements in a
complete, logical and orderly manner.”

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