The FTSE 100’s level of compliance for the 2005 reporting season, the first in which the revised Combined Code applied to all companies, was extremely high and in certain cases companies have been a lot more forthcoming in explaining why they have not complied with provisions, according to research by KPMG, the accountancy firm.
KPMG said the fact companies were reporting areas where they deviate from Code provisions – 71 companies reported at least one exception – is a sign of a healthy attitude towards the “comply or explain” approach. A 100% rate of compliance would have suggested the Code was being treated as a gold standard, and KPMG argued this would not be in the spirit of the Code and could undermine the authority of corporate governance reporting.
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