A new survey shows UK businesses are unclear about many major demands of the new Companies Act legislation.
Nearly half of UK businesses are unaware that all companies with a turnover of greater than £6 million are now legally obliged to produce a mandatory Business Review, according to research carried out by PMP. The Review covers forward looking performance indicators, environmental matters, and social, community and employee issues.
The survey also found that finding the necessary time and resources to meet the requirements of the Companies Act 2006 was rated a key challenge facing UK business.
According to the Government the legislation, which received Royal Assent on 8 November, has been substantially rewritten to make it easier to understand and more flexible. But the survey, sponsored by business process management (BPM) software vendor Hyperion, found organisations of all sizes remain unconvinced that these new reporting standards will be of benefit to business.
Some 72% of companies with a turnover less than £100m are unaware of the European Accounts Modernisation Directive – even though they are already subject to it (and which is now formally incorporated as part of the new Companies Act).
Companies of all sizes expect the demand for company performance reporting to increase in the next few years. However, companies of less than £100m turnover feel far less confident than larger businesses that their current reporting infrastructure meets all the requirements of the Companies Act 2006.