Don’t hold back
Good news for financial reporting. Watchdogs have done their annual check-up on the books of the FTSE 350 and found its members had maintained its “overall quality of financial reporting”. Though, that said, 27 companies have been told to restate “aspects” of their accounts.
The most frequent area for correction is cashflow statements, where companies appear to struggle with knowing how much money is moving through their accounts.
Sarah Rapson, head of supervision at the Financial Reporting Council, warns companies this is not a good time to get their accounts wrong. “During periods of economic and geopolitical uncertainty, it is vital that companies not only comply with relevant reporting requirements but deliver high-quality information for investors and other stakeholders.” Uncertainty is one way of describing it.
Getting down to business
Information from companies may be important, but what’s it all for? That existential quandary has been dogging organisations since the first accounts were compiled in Mesopotamia 7,000 years ago (almost as long as it’s taken to come up with an audit reform bill).
However, recent research by the High Pay Centre, a think tank, has got an answer: six out of 10 (58%) people believe the “top priority” for business should be delivering better pay and conditions for workers. But only around one in five (18%) believes that’s what actually happens, and 70% saying having workers on boards would improve pay and conditions.
The High Pay Centre’s report says: “Strengthening workers’ voices in the workplace would not only improve working conditions, but would also serve to improve business decisions.” At this stage, those voices may need a megaphone.
Fair play
Australia has scored a notable first: Down Under they’ve decided to have large multinational companies report publicly on their tax affairs country by country. This has long been an aim for many campaigners around the world, who see country-by-country reporting as a route to improve transparency over the tax affairs of big corporates.
According to Australia’s budget documents published this week, multinationals will also have to publish a statement of their “approach to taxation”.
Still, after losing to New Zealand in cricket’s T20 World Cup, it’s nice for Australia to win something. (That remark will come back to haunt us.—Ed.)
On the right lines
Boards have been challenged to ensure their companies have a code of ethics, presumably to ensure everyone knows right from wrong. The call comes from David Grayson, an ethics prof at Cranfield University and chair of the Institute for Business Ethics (IBE). In a blog on the IBE’s website, Grayson reflects on the institute’s most recent survey, which found that 15 FTSE companies revealed no evidence of having a code.
Though he admits a code is no panacea for corporate shenanigans, Grayson writes: “At the IBE we are clear: having a code of ethics, as an agreed expression of how a company wants its employees to behave, is a necessary step, but insufficient on its own, to build and maintain an ethical culture—a culture of integrity and fair dealing.”
So, laggards, sort it out.
Public enemies
Speaking of shenanigans, law makers in the US want a searchable public database revealing which directors and companies may be guilty of corporate crime. Three Democrat senators—Mary Gay Scanlon, Dick Durbin and Richard Blumenthal—have asked the US attorney general in a letter to expand its collection of corporate crime data.
“Currently, there is no comprehensive national data collection on corporate crime,” they write, adding that a database would “provide significant benefits for law enforcement agencies, researchers and the general public”.
That’s one list you don’t want to be on.