The percentage of FTSE 350 companies complying with the UK corporate governance code has declined in 2015, despite providing better explanations, new research has found.
According to Grant Thornton’s corporate governance review, called Trust and integrity – loud and clear?, 57 per cent of FTSE 350 companies were fully compliant with the codes in their latest financial statements, a decline from 61 per cent in 2014.
Of the remaining companies, 90 per cent complied with all but one or two of the code provisions, also down from 93.5 per cent in 2014.
The code requires half of the board to be independent non-executive directors, and 12.8 per cent of the FTSE 350 did not comply with this provision. Only 13 per cent of chairmen personally discussed culture in their primary statements and only 11 companies applied all the regulatory requirements in a “connected, transparent and informative way”.
The firm also found companies have continued to struggle with their forward-looking reporting, with only 41 per cent giving a good or detailed disclosure, while half of the companies commit to undertaking an audit tender at least once every ten years. Nearly all (91 per cent) of businesses have an internal audit function.
The review also found the average length of an annual report was 158 pages, compared to 155 in 2014, while the financial statement has reduced in average length to 61 pages from 68.
Read Grant Thornton's full report here.