Video:

Financial Reporting in 5 years time

Author: Caroline Newsholme, James Kirk (yBC.tv)

Categories: Director's Remuneration, Financial Reporting
Tags: Director pay, reform
Financial Reporting will show how reformed in the financial industry are being implemented. Caroline Newsholme discusses reporting director pay.

Financial reporting creates transparency

I think it does very much depend on the economic climate at the time. With the collapse of the banks and a couple of other very high profile individuals who’ve received very substantial pay offs where their companies have failed. It’s obviously topical and the media are going to pick up on substantial director’s packages. I think there’s probably less risk of that if the economy is performing and there are less examples of business going to the wall. I think when things are tough, everybody’s looking at what everybody else is being paid. I would like to say that in five years’ time I think that some of the reforms that are being introduced now will have been further refined. They’ll have had a chance to settle in and people can see how they work and whether they work and will have made any adjustments accordingly. I think there is still going to be quite a substantial level of reporting going forward once the reforms come in. With detailed reports obviously comes the risk that detail gets buried or people don’t quite appreciate the significance. So I think we have got to be careful that we don’t replace one reporting system with another, which ends up looking pretty similar to what we’ve already got. But I think it’s definitely a move for good at the moment anything which is designed to more closely link pay and performance and to not reward failure has got to be a good thing and it’s certainly higher up the corporate agenda, and I think that that’s got to be to our advantage, and hopefully we will see the benefit of this as the economy picks up and companies prove their performance in time.  

Inside Finance has more TV shows about financial reporting and will continue to follow discussions about reforms and legislations that affect business.


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