A FUNDAMENTAL CHANGE in corporate culture is needed to restore the public’s shattered trust in business. That’s the key finding from a poll of finance directors carried out by CA magazine and law firm DLA Piper.
The survey, based on responses from over 160 senior finance professionals who are also members of ICAS, reveals growing confidence in the UK economy, with FDs in the UK more optimistic than their counterparts elsewhere.
Finance directors were asked to rate nine factors for their importance in restoring public trust. Starting with the most important, the factors were:
1. A change in corporate culture
2. Prioritising sustainability, not short-term performance
3. More transparent, understandable financial reporting
4. Stronger, more independent boards
5. Greater emphasis on teaching and instilling ethics
6. Better communication between business and the media
7. A fresh approach to executive remuneration
8. Better communication between business and politicians
9. More effective regulation
Improving corporate culture, sustainability and clearer financial reporting were all key issues for ICAS members.
Meanwhile, the finance directors in the survey also expressed growing confidence in the UK economy, with 72% expecting “modest growth” for the remainder of this year and 10% “strong growth”.
This was a dramatic uplift from previous years (in 2013, under half – 49% expected modest growth, while just 3% expected “strong growth”).
Also, fewer FDs reported recession-related challenges such as less favourable terms for bank finance (15% said they had experienced this in 2014, down from 25% in 2013,) or an increase in bad debts (27% in 2014, compared with 36%).
UK-based FD’s were more optimistic than elsewhere, with 12% predicting “strong growth”, while only 3% of non-UK FDs were as confident.
Simon Rae, managing partner of DLA Piper in Scotland, said: “The continued growth in confidence that FDs are expressing is a clear sign of optimism although there is, as ever, room for improvement.”