ICAS has also raised concerns about proposals to introduce a broad scope Directors’ statement on the effectiveness of internal controls and the implications this could have on businesses and in making the UK an attractive place for business.

The increasing scope of the role of audit committees is also highlighted as an area of concern and ICAS calls for the code to confirm that audit committee responsibilities
are restricted to the annual report. The institute also draws attention to the importance of balancing the need for greater reporting at the same time as keeping annual reports readable, accessible and relevant.

Bruce Cartwright CA, chief executive at ICAS, said: “We firmly believe that ethical leadership should be an integral part of the UK’s Corporate Governance Code. It’s vital that businesses maintain their reputation, public confidence and support.

“Businesses are significant as employers, as the providers of goods and services, and have a key role in our communities. We need leaders to promote ethical leadership and establish a publicly available code of conduct/ethics for their companies which sets the standards of behaviour expected of all directors and employees.”

Mr Cartwright continued: “We also have strong concerns that companies could struggle to meet the broad proposed scope of the Director’s statement on the effectiveness of internal controls which covers operational, compliance and reporting controls.

“This could have significant resource implications for businesses. Proportionate regulation has an important role to play in making the UK an attractive place for business, so any changes should support wider government objectives to grow the economy. If introduced, we believe that a transitional period would be necessary but would also like further clarification on how the UK would avoid the detail, complexity and onerous burdens which is driving business concerns.”