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Commenting on the publication of the action plan, Jo Iwasaki, ICAEW’s Head of Corporate Governance, said:
“The success of any corporate governance framework hinges on its ability to adapt and evolve to keep up with changing times. The global financial crisis identified areas in need of further improvement but it is important to make sure further requirements do not become an unnecessary burden on companies.
“There are several proposals with merit in the communication from the EC, including the recommendation to require companies to communicate clearly how they address corporate governance issues. Companies with effective corporate governance are better run in the long term. If such information is not available, shareholders cannot be expected to become interested in companies’ affairs beyond short term gains.
“Meaningful information is needed from companies on their approach to corporate governance, including risk management, remuneration and board diversity. It is not that there should be more information - it is important that the information is understandable to shareholders. In turn, shareholders must carefully respond to the explanations given. It is crucial that both sides play their part.”