His praise for the accounting profession – an extremely rare occurence following the demise of Andersen – was made in a parting speech at the CBI’s annual dinner.
Vallance said that in the Enron-age it was tempting to ‘leap to conclusions’ and look at the ‘failure of auditors or non-executives’.
But, he said, to find the true source of weakness in the system of corporate governance, one needed to take a more holistic view.
Vallance said the ‘ever-increasing pressures from the financial markets’ fuelled by highly geared remuneration packages’ was encouragement for aberrant behaviour.
He said it was a temptation that must be resisted: ‘A company that simply dances to the fickle tunes of the analysts and the financial markets (rather than attending to its customers, its employees, its ordinary shareholders and the community at large) does itself no good – nor the wider interests of business, nor the cause of capitalism.’
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