UK companies handicapped by disclosure requirements
UK companies face a huge burden in complying with accounting and disclosure requirements and are at a competitive disadvantage as a result, according to the latest research by Deloitte & Touche.
A survey of 40 European top 1,000 companies rated 18 disclosures from categories including segmental analyses, financing and treasury, corporate governance, cashflow and directors’ remuneration. In no category did UK companies’ levels of disclosure lag behind those in France, Germany or Italy.
Deloittes’ chairman, Martin Scicluna, said the quality of disclosure required of UK companies was a problem. ‘A company competing against overseas rivals is at a disadvantage if its competitors publish less information about their activities than it does about its own.’
Scicluna said he wanted to see a level playing field and called on the International Accounting Standards Committee to help develop an international operating and financial review for more rigid international accounting standards.
The biggest area of difference between UK and European companies was in corporate governance, according to Deloittes’ senior manager Clive Goodhead. Pages of disclosure about directors’ remuneration and shareholdings in UK annual reports contrasted with single paragraph details in German and Italian reports.
Goodhead said: ‘France is taking corporate governance more seriously, but in the UK it has really taken off. There is very little interest in it in Germany and Italy, however.’
