Mark Hynes - thoughts on corporate disclosure

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

Thursday, October 26, 2006

Supply chain disclosures in Business Review going ahead

More is emerging about the sudden, last minute changes to the Business Review, introduced as an amendment to Companies Bill.

These changes seem to have been introduced as the result of pressure from CORE, a coalition of 130 campaigning organisations. In their proposals
http://www.corporate-responsibility.org/module_images/Media%20Briefing%20Oct10-1.doc published on October, there was an amendment which would require companies to publish as part of their Business Review, "information about persons with whom the company has contractual or other arrangements which are essential to the business of the company".

This amendment was quietly adopted by Government, and passed on a vote last Wednesday. Business organisations such as CBI were caught on the hop, and had no chance to express concerns. In this amendment, there was neither consultation nor certainty in the final outcome.

What do these changes mean in practice? Superficially, the new change requiring companies to disclose information about their suppliers looks similar to the OFR famously scrapped last year. However the proposed OFR was based on detailed standards; the new plans for supply chain disclosures are not. This makes them much harder for IRO’s to interpret.

Obvious concerns are about "information" and "persons". There is no guidance for companies on what "information" means - detailed, confidential etc -. that I can find. Thus the result will be patchy at best. Potentially also, "persons" could mean Directors, consultants, almost anybody. And how can you give information about them without breaching the Data Protection Act?

So Investor Relations professionals will be obliged to review their processes for producing the Business review – without the benefit of any guidance on content.

4 Comments:

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  • At 6:02 am, Anonymous Anonymous said…

    Dear Mark
    hi
    this is Samya, from Malaysia.
    I've some questions about investor relation, but I couldn't find your email in your blog. can u plz give it to me?
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