A case of foggier finances?
It seems financial confusion is currently widespread in UK companies.
Communications consultancy Radley Yeldar says firms are failing to meet the EU Transparency Directive, introduced last January, which requires companies to issue interim management statements (IMS) midway between the half-year and full-year results.
It says 14 per cent of UK companies have not met the requirement to discuss their financial position and IMS reports already produced range from 28 to 13,000 words.
Perhaps misunderstanding has arisen because there is already enough paperwork to contend with in business. Do you welcome moves towards financial transparency? Or does the current confusion suggest extra bureaucracy or EU involvement serves only to cloud or disrupt such processes?
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I am not so sure it has been misunderstood as missed or ranked far down a list of priorities for most companies, requirement or not! More visibility and honesty in financial information should of course be welcomed by those who work in purchasing – and beyond, of course – but local and national governance is better organised to offer more in the way of (excuse the terrible term) “joined up thinking” than the EU. There have been a number of good ideas that arise from the EU which clash with one another and cause massive problems for an area of society or type of businesses in one sudden burst.
If a Directive is poorly worded and comes as part of a poorly timed series of new requirements from business, how should organisations be expected to accurately meet it first time around? If the terminology of the Directive allows for a wide variety of interpretations, it is likely less clearly thought out than should have been the case and bound to cloud requirements and avoid the desired impacts.