Chief financial officers in Australia and Asia have divided views on whether corporate governance reduced entrepreneurial activity, according to a new survey by the Institute of Chartered Accountants in Australia (ICAA).
Of all respondents, 38 per cent disagreed that greater emphasis on corporate governance reduced their entrepreneurial activity and a further 27 per cent of respondents were reluctant to agree or disagree.
“Only 35 per cent of respondents actually believed increased emphasis on corporate governance reduced their entrepreneurial activity,” ICAA executive general manager Lee White said.
“This suggests that some of the comments from directors and other businesspeople about increased governance requirements hindering their risk taking may be overstated.
“It may also indicate that as a result of the global financial crisis there is greater recognition by CFOs of the fact that good risk management contributes to, rather than detracts from, effective risk taking.”
Another key finding from the survey was that overall 65 per cent of respondents indicated their company did not report on environmental sustainability.
“The majority attributed this to the fact that reporting on this and other aspects of corporate social responsibility (CSR) was not a mandatory requirement,” White said.
“When it comes to CSR reporting, there is still a long way to go in changing the mind-set of companies.
“CFOs can’t ignore the fact stakeholders are becoming increasingly aware and concerned about environmental and social impacts. It’s just a matter of time before stakeholders make companies more accountable.”
The ICAA commissioned Beaton Research & Consulting to conduct the survey, which involved 250 CFOs from listed companies across Australia, Singapore, Hong Kong and Malaysia.
