Red tape could swamp business

Company directors, in particular finance directors, are currently facing a welter of consultation on corporate governance and the role of non-executive directors, company law review modernisation, a Financial Services Authority review of the listing rules, as well as a series of new UK and international accounting standards.

Added to this is the growing red tape coming out of the EC. Brussels has 23 directives and projects underway at present.

John Pierce, chief executive of the Quoted Companies Alliance, which represents more than 300 public companies outside the FTSE-350, said: ‘There’s not the time to give them (consultations) sufficient thought and respond in a balanced way.

‘My theory is that these proposals will all get elbowed through and we’ll all have to live with half-baked rules.’

In the wake of the Enron collapse the Treasury launched a review of financial reporting which was swiftly followed by the announcement that the Treasury select committee would also be conducting its own review.

This month the UK Accounting Standards Board has published a raft of proposals for a number of new standards, while the International Accounting Standards Board will publish 10 new proposals by the end of this year.

‘It’s a jungle of regulations and all of it’s going to flop onto FDs’ and accountants’ desks soon,’ said Pierce.

The Quoted Companies Alliance is not the only body urging regulators and governments to do more to help directors deal with the mountain of red tape.

The London Investment Banking Association, which counts most of the large City banks among its members, on Friday called on the Treasury and FSA to devote more staff to European issues.

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