How does the conceptual framework address the issue of management’s stewardship responsibility?
Several respondents to the discussion paper expressed a concern that the proposed objective was too narrowly focused on resource allocation decisions. Although most respondents agreed that decision-usefulness was the appropriate objective, respondents argued that capital providers make other decisions that are aided by financial reporting information in addition to resource allocation decisions. For example, shareholders must decide how to vote on whether to retain directors or replace them and how members of management should be remunerated for their services. Shareholders’ decision-making process may include evaluating how management of the entity performed against management in competing entities in similar circumstances.
Related Questions
- Are current Government tactics to address the issue working? Can lessons be learnt from other European countries?
- How will this activity address education, outreach and communication issues outlined in the Framework document?
- How does the conceptual framework address the issue of management’s stewardship responsibility?
