Mark Hynes - thoughts on corporate disclosure

Opinions on changing rules, changing best practices, and their effect on investor relations officers.

Thursday, October 19, 2006

And still the Business Review won’t stop moving…

After all the OFR shenanigans, Investor Relations professionals must have hoped that the Business Review had settled down, and the contents become certain. Wrong.

The Government has moved at the last minute to force issuers to disclose information on their supply chains. According to the Secretary of State, in a letter to FT, this is less about lists of suppliers, than about human rights and environmental issues down the supply chains.

Remarkably, for once, issuers and investors are united in their opposition to this plan. Investors are concerned that this could be a return to box-ticking, while issuers will concerned about yet another increase in regulation.

What should you include, and what not? For those companies who already cover the issue in some detail in their annual reports, will this mean a lower standard? The Bill’s amendment allows flexibility in what companies should disclose, rather than imposing a standard. This will surely result in at best, a patchy outcome.

Meanwhile, we also have to be worried about the direction this further change is leading us. The Companies Bill was supposed to be de-regulatory. And yet at every turn, the Government is loading the Bill with further requirements. Before the truck departs, let’s just add this, in case we need it in the future.

And, in case we think this is all over, the Government gave warning that “stricter measures could be imposed if the provision in the companies bill failed to achieve the desired improvement in corporate standards”.


  • At 3:38 am, Anonymous Craig said…

    When it comes to discloser, there should always be a standard of what should be included. Yes, the Bill’s amendment allows too much flexibility in what companies should disclose. This will only result in a very patchy outcome.

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