Introduction
Published online by Cambridge University Press: 23 July 2009
Summary
Good company reporting is essential. It provides information to shareholders, as well as creditors, employees and others who may have an interest in companies and their activities. Equally, the need for information has to be balanced against the cost to the company of collecting and publishing that information, as well as the cost to the readers in finding the information they are seeking. More information is not necessarily better information; and the Government is firmly committed to improving the quality rather than the mere quantity of company reporting.
Disclosure and information sharing represent a substantial portion of company law. The briefest of glances at the legislation and legal texts will highlight to the reader the importance of the so-called ‘disclosure philosophy’. Disclosure requirements appear in statutes, in codes of practice and in rule books of various institutions with which many companies are connected, such as the Financial Services Authority. Information is delivered and shared in a variety of different forms and by using a broad range of media including written reports, newspaper reports, internet and advertising. There are many participants involved in the company's disclosure activities, especially for larger public listed companies.
Despite this emphasis on disclosure a considerable degree of scepticism also exists about the effectiveness of the disclosure system in the UK. The main criticisms focus on the complexity and cost burdens that pervade the disclosure system and the lack of clear measures used for assessing a company's performance, as well as the poor quality of the verification process, the failure of such disclosure to provide users with what they need and, finally, reactions to information that is produced.
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- Corporate Reporting and Company Law , pp. 1 - 10Publisher: Cambridge University PressPrint publication year: 2006