The results of our second QCA/UHY Hacker Young Corporate Governance Behaviour Review show that companies continue to struggle with certain corporate governance disclosures, despite some improvements.
In partnership with accountancy firm UHY Hacker Young, we have benchmarked corporate governance disclosures made by 100 small and mid-size quoted companies against the minimum disclosures of our Corporate Governance Code for Small and Mid-Size Quoted Companies.
Our 2014 review found that company disclosure has improved slightly in areas, such as audit committee reporting and risk management disclosures, and regressed in others, noticeably in the posting of voting decisions of general meetings on corporate websites. Companies continue to have difficulty with:
- linking the application of corporate governance to corporate strategy;
- making board evaluation disclosures; and
- describing the role of external advisers in the boardroom.
This review offers some top tips for this reporting season, drawn from discussions with institutional investors about the review. These tips are designed to help companies focus on improving disclosures in the areas that investors are most interested in and include:
- Link strategy and corporate governance;
- Understand your risks and explain how they link to strategy;
- Focus on the audit committee report;
- Describe board evaluation procedures; and
- Explain why each director is on the board.