Roger Davis, a partner at PricewaterhouseCoopers, backed the reform recommendations in today’s Final Report on company law but said focus must now switch to early legislation.
He said: ‘The important step now is for the government to find parliamentary time for legislation.’
He went on: ‘The proposals for the once in a generation reform for company law are potentially far reaching. They will raise expectations of directors, of shareholders’ and use of their power, and of auditors.’
The report called for a ‘radical simplification’ of the law, simpler decision making and administration requirements for small companies, which the author hopes will result in lifting burdensome accounting and audit obligations.
Clearer guidance would be set out in the Companies Act for directors and shareholders, which will provide more openness and also take into account wider interests and the impact of the actions on the community and environment.
An Operating and Financial Review would also be introduced for SME’s to provide a business overview as part of the annual report giving an summary of the companies performance, plans and prospects.
Davis went on to say: ‘This is in the cause of strong governance in the interests of a strongly competitive economy. The further move away from a compliance approach to governance is therefore almost welcome.’
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