In February 2014 ACCA published the consultation paper Creating Value Through Governance – Towards a New Accountability, written by Paul Moxey, ACCA's head of corporate governance and risk management, and Adrian Berendt, chairman of the ACCA Global Forum for Governance, Risk and Performance.
Governance and risk management are complex matters that go to the heart of the thinking about business, finance and economics. The paper does not claim to include all the right questions, let alone all the right answers. The hope is rather that this inquiry will lead to a better understanding of the problems and also to some solutions.
The consultation paper is not, at this stage, a considered statement of ACCA's policy on corporate governance but it does put forword ideas that ACCA is keen to see discussed and developed further.
To find out more about this consultation, you can:
- download the full consultation paper, and
- view videos about the consultation.
Following the consultation period ACCA intends to publish an updated paper on the subject of governance and value creation, reflecting the responses received and discussions held.
Invitation to comment
ACCA welcomes comments about the issues raised in the paper, as well as responses to the other specific questions asked. The paper asks over 50 questions, eight of which are considered key.
A consultation questionnaire with these eight questions is available both as:
- a Word document, and
- a Web-based survey.
The closing date for responses is 31 August 2014. Please email responses to Paul Moxey, head of corporate governance and risk management, ACCA.
The consultation paper refers to a number of earlier ACCA publications.
- Corporate Governance and Wealth Creation (Occasional research paper no. 37), ACCA 2004. This paper is a study of the links between corporate governance and wealth creation including the results of a survey of chairmen and finance directors of UK listed companies.
- Corporate Governance and Risk Management Agenda. ACCA 2008. This paper was launched in October 2008 at the same time as Corporate Governance and the Credit Crunch. It was issued on behalf of ACCA’s Corporate Governance and Risk Management Technical Committee. The Agenda set out ACCA’s view on the purpose of governance and 10 principles that it said ‘that ACCA believes are fundamental to all systems of corporate governance that aspire to being the benchmark of good practice’. They were intended to be relevant to all sectors globally, and to any organisation having a significant degree of separation between ownership and control. Many of these principles are also relevant to organisations where ownership and control lie with the same people’. The current consultation Creating Value is part of a process of updating ACCA’s policy on governance and risk.
- Corporate Governance and the Credit Crunch, ACCA 2008. This was one of the first published papers that explained in simple terms what went wrong in the credit crunch. It was structured around the 10 principles in ACCA’s Corporate Governance Agenda.
- Risk and Reward: Tempering the Pursuit of Profit, ACCA 2010.
- Risk and Reward: Shared Perspectives, ACCA 2011.
Risk and Reward expanded on many of the issues set out in Corporate Governance and the Credit Crunch. It focussed on the people side of the issues. It discussed how approaches to risk management had been problematic, what drives human behaviour, how cognitive biases harm decision making, why regulation did not always work and how to assess and report on an organisations cultural health. ACCA is currently studying these issues in more depth and plans to report on the first stage of its work in June 2014.
- ‘Risk: The Truth About Leverage’, Accountancy Futures, Edition 3, ACCA 2011.
The paper explored the role of leverage in the credit crunch and explained how securitisation allowed risk and reward to be geared over 2000 times.
- Confidence Accounting: A Proposal, ACCA, CISI, Long Finance 2012.This paper discussed the problem of uncertainty inherent of many of the values appearing in a set of accounts. It proposed a possible solution called 'confidence accounting'. The proposal was issued as a consultation and raised considerable interest. From the responses the most useful way to help address the problem of uncertainty would be to look at the role of audit committees.
- Corporate Governance and Risk: A Study of Board Structure and Process (ACCA research report no 129), ACCA 2012. The report is a detailed academic study of board structure and process drawing of the large body of research previously developed by the authors and further research carried out for this report.