PwC Slams Financial Institutions Over Corporate Governance

by Robin Pilgrim, LawAndTax-News.com, London

09 April 2004

According to a study recently conducted by PricewaterhouseCoopers and the Economist Intelligence Unit, and published on Tuesday, financial institutions have missed the point of the recent international drive to improve corporate governance, concentrating on complying with externally imposed guidelines rather than seeking to improve the quality of management.

Of the more than 200 senior executives surveyed from throughout the world's finance industry, 69% revealed that their firms now had a more systemic risk management process in place, whilst around 75% felt that there was now a greater emphasis on good corporate governance within their operation.

However, according to PwC, significantly fewer stated that their boards now had access to better forward-looking data, or that the information being provided to top management had improved substantially in quality.

Duncan Fitzgerald, the accounting firm's Global Risk Management Solutions partner, expressed disappointment that this appeared to be the case, observing that:

"The governance challenge is not simply to keep pace with the regulators and ensure compliance with the rulebook."

"What is needed is a new and integrated approach to governance that does not limit an institution's ambitions to avoiding trouble with regulators or other authorities but strives to improve the quality of its management and to reap the benefits of being seen to be at the leading edge of good governance."

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