The global financial crisis has underlined the serious and growing problem with corporate governance, highlighting the need for standards of decency and ethics in business, says ACCA (the Association of Chartered Certified Accountants) today in a discussion document called Taken on Trust.
The paper highlights the fact that business failures started years before the credit crisis and they still continue to happen. It tackles the problem of the lack of public trust in both business and private sectors and asks whether, with public trust in both businesses and the state at an all-time low, there should be a move to governance utilising accountancy best practice that covers both the business and private sector.
Gillian Fawcett, Head of Public Sector at ACCA says: “Various reports and new standards for corporate governance have proven themselves not to be strong enough. They remain too vague to hold actual value. Furthermore, the MPs’ expenses scandal and near-collapse of the banking systems have added to the public’s disillusion with the political sphere, not only business.”
ACCA’s paper asserts that there is an undeniable link between good governance and public trust and this is why setting new ethical standards should be the new priority. The focus needs to shift from having the right systems and processes in place to standards of behaviour and organisational culture.
Gillian Fawcett adds: “The critical issue for corporate governance is the whether there should be a shared set of ethical standards for both private and public sectors? Given the changing landscape of the public sector there is a strong case for having greater cohesion on corporate governance.
“The public ownership of the banks and the growth of Public Private Partnerships (PPP) and Public Finance Initiatives (PFI) delivering public services mean that both sectors need to be subject to the same regulations.”
“This changing landscape makes it even more relevant to review governance issues and consider introducing a common approach to governance – and one that everyone can understand. The challenge, of course, is how. ACCA looks forward to that debate.”
For further information, please contact:
Andrew Swailes, ACCA Newsroom
P +44 (0)20 7059 5823, +44(0)75 2539 2535
1. ACCA (accaglobal.com) is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 362,000 students and 131,500 members in 170 countries worldwide.
2. ACCA has worked with governments, national organisations and development agencies in emerging economies- for over 20 years- promoting the accounting profession, to create value for the communities, businesses and individuals it serves.
3. ACCA believes that globalisation of business means that one set of reporting standards is essential. We favour the principles-based IFRS.
4. ACCA understands the real issues facing small businesses as 63,000 of our members work in SMEs or small partnerships worldwide.