Swedish business groups reject need for more EU corporate reporting rules

A coalition of leading Swedish business, audit and corporate governance groups has issued a strong response to the European Commission’s (EC) consultation on corporate reporting, launched in November last year, stating clearly that the rules are fine as they stand. The groups said that any additional requirements introduced at the EU level will simply add more unnecessary bureaucratic burdens and costs for business, for no real benefit. In the context of this EU consultation, corporate reporting comprises the financial statements of companies, their management report (which includes the non-financial and corporate governance statements), and country-by-country reporting. It would also include sustainability information linked to the EC’s proposed Corporate Sustainability Reporting Directive (CSRD). The consultation will directly feed into an impact assessment that the EC will prepare in 2022, with a view to assessing problems with the quality of corporate reporting and comparing possible options to remedy these problems. The Confederation of Swedish Enterprise, the Association for Generally Accepted Principles in the Securities Market, the Swedish Corporate Governance Board, FAR (the institute for the accountancy profession in Sweden) and the Council for Swedish Financial Reporting Supervision, have published a joint position paper in response. “We agree with the EC that it is essential that investors have trust in the market. However, we remain to be convinced that amendments to EU legislation are the required approach for addressing the relatively few issues of corporate failures that the Commission has highlighted,” it states. “Whatever rules are put in place, future corporate failures are inevitable. Any proposed amendments to the EU legislation therefore must be carefully assessed and weighed against other measures. It is important that any measures taken must be both relevant to the problem identified and proportionate. “We are concerned that any intervention that adds more rules for corporate governance and audit, based on the EC’s description of the problems in its call for evidence, may actually increase the administrative burden for listed companies, without bringing any real benefits for stakeholders or companies,” continues the Swedish groups’ position paper. The groups suggest that any proposed measures should be seen in the light of other measures by the EU that affect corporate reporting or corporate governance, which have already been adopted or are in the pipeline. The potential for overlap, confusion and duplication is obvious. These include reporting according to the EU’s taxonomy for sustainable activities and the initiatives on CSRD and sustainable corporate governance. “The Swedish capital market is an important source of finance within the EU. More than 400 companies have their shares listed for trading on a regulated market in Sweden, with a total market capitalisation of nearly SEK12,000bn (€1,140bn),” continues the paper. “We believe that the quality and reliability of corporate reporting by listed companies in Sweden is already high, with very few failures recorded. We consider that this is a result of – among other things – strong corporate governance, high-quality audits, transparent reporting and efficient supervision and enforcement. In our view, this suggests that there is no real need to amend the EU regulation in order to make the Swedish capital market more efficient or increase trust among stakeholders,” concludes the joint statement.

Swedish business groups reject need for more EU corporate reporting rules

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