Reporting on Corporate Governance (CG) has become central to several CG codes, rules and guidance aimed at improving managers’ accountability, especially after the high-profile corporate scandals and the global financial crisis. Nowadays companies are requested to convey to external stakeholders, information on CG structures, as well as on CG mechanisms in place. However, while this increasing regulation worldwide brought to extensive CG disclosures, reporting on CG often appears very technical, fragmented and disconnected from other corporate disclosures, especially where the country legal environment, and in particular the fear of legal liability and litigation, increases managers’ reluctance to voluntary disclosures. Even when disclosures are mandatory, this fear of litigation influences the content, amount, readability, language and quality of disclosures. The “Integrated Reporting Council” IRC, which has long promoted the adoption of integrated approach to corporate reporting, urges companies to show how CG, together with other corporate elements, contributes to value creation in the short, medium and long term. It is their belief that CG reporting shall evolve towards communicating major developments that have impacted the business during the year, major challenges expected for the future and integrate key governance information with the rest of business reporting. The crucial point is not providing more disclosure on CG, but providing better disclosure, so that investors and other stakeholders will find it more and more useful to understand how—and how well—a company is governed. In this context corporate reporting (on CG) should not be considered as a communication tool only, but also as a CG mechanism which enhances corporate accountability.
