LONDON, March 31, 2011 /PRNewswire/ -- Changing the rules and guidance on what should appear in a narrative report could lead to a huge increase in boilerplate reports. So warns the IR Society in its response to the Effective Company Stewardship: Enhancing Corporate Reporting and Audit enquiry launched by the Financial Reporting Council.
Commenting on the Society's submission Richard Davies, Chairman, said:
"We are seriously concerned about many aspects of the proposals made in this consultation.
"Assumptions that enhanced rules will lead to better, more useful information for investors are incorrect. We worry that it will lead to the exact opposite of what we all want; clearer communication of the equity story. More helpful would be a sorting out of the morass of different rules that issuers have to contend with allowing companies to focus on quality, not quantity."
Other concerns highlighted by the IR Society's response include the misconceptions around savings to be made by enhanced use of technology. Many UK companies have taken advantage of the changed default to electronic communication with investors, meaning that now the principal cost is in preparing the on line documents. The cost of doing this is significant and for some companies it may well outweigh the saving from printing fewer hard copies, argues the Society.
Notes for editors:
The Investor Relations Society's mission is to promote best practice in investor relations; to support the professional development of its members; to represent their views to regulatory bodies, the investment community and government; and to act as a forum for issuers and the investment community.
The Investor Relations Society represents members working for public companies and consultancies to assist them in the development of effective two way communication with the markets and to create a level playing field for all investors. It has nearly 600 members drawn both from the UK and overseas, including the majority of the FTSE 100 and much of the FTSE 250.
Our response is based on feedback we have received from our members who are engaged in the preparation of Annual Reports both as companies and advisors.
A full copy of the Society's response to the FRC can be found at: http://www.irs.org.uk or by phoning +44(0)20-7379-1763 for an e-mail copy For further information contact: The Investor Relations Society Richard Davies - Chairman +44(0)20-7492-0501 Mark Hynes - Policy Committee Chairman +44(0)7957-430-333 Michael Mitchell - General Manager +44(0)20-7379-1763
SOURCE The Investor Relations Society