Make way for governance

The importance of governance professionals inside corporates is increasingly influential, with 65% of those in a poll of practitioners saying the influence of a governance function is growing.

The survey, by the Chartered Governance Institute, finds 65% of 900+ members say their importance is on the rise.

Board and executive succession planning is a growing area of responsibility, according to 59%, while 66% say board information quality is also high on the list of rising priorities.

Neil Newman, commercial director at CGIUKI, says the research confirms the importance of the governance expertise provided by company secretaries. But he added a warning.

“The growing influence of the profession must, however, be matched by the structure, resource and recognition the role now demands.”

Make time for US reporting changes

The CFA Institute, a bastion of knowledge for financial knowledge, says almost two-thirds (62%) of its members are opposed to the idea of US companies switching from quarterly to semiannual reporting.

More, 70%, say they are opposed to companies having the flexibility to make the choice themselves. A hefty 85% say they are worried about “comparability” between companies, should flexibility be introduced.

The response comes to a consultation run by the Securities and Exchange Commission (SEC) on reforms that would allow companies to dump quarterly reporting in favour of semiannual disclosures.

Mostly, though, the CFA Institute is worried about the SEC’s scheduling of the consultation and potential reforms.

“For those reasons,” write CFA Institute staffers, “we believe the SEC should defer these proposals and sequence its requests for comments in a meaningful order, with sufficient time for investors to evaluate the proposed changes, the interrelationship among the proposals and the potential impacts of rules that have yet to be published and for the Commission’s own Division of Economic and Risk Analysis to conduct its own cumulative analysis.”

Certainly seems like the SEC might want to take a breath.

Making light of sustainability?

This week, the European Commission has finalised amendments to European Sustainability Reporting Standards (ESRS), part of Brussels’ process to lighten the load of green regulation.

Attentive readers will know this process has been under way for just over a year and is accompanied by changes to the Corporate Sustainability Reporting Directive’s (CSRD) scope, and further alterations to the Corporate Sustainability Due Diligence Directive (CSDDD).

In a statement, the Commission said: “The revised ESRS are shorter and clearer, add new flexibilities and streamline key processes.”

Datapoints for disclosure have been cut by a whopping 60%, potentially cutting reporting costs by 30%, according to the Commission.

Not everyone is entirely impressed. Shareholder advisers Minerva Analytics conclude fewer companies will be reporting across a narrower set of datapoints, with a bit of “methodological flexibility” thrown in for good measure.

“The framework is simpler, but the informational burden shifts. Investors will have less standardised data, particularly outside large-cap issuers, and fewer datapoints within it, while the need for interpretation and supplementary analysis grows.”