FRC Reform

Consultation on the future role of the Financial Reporting Council published

The FRC welcomes the Government’s intention to bring forward proposals to provide it with a reformed set of statutory powers following the joint consultation on FRC reform.

Commenting on this decision, Chairman of the FRC Baroness Hogg said

“We are pleased that the Government has decided to proceed with the proposals to reform the FRC and the appointments we have announced today will help to take them forward. The reforms will simplify the FRC’s over-complicated structure and enable it to mobilise all the expertise in its operating bodies to strengthen the UK voice in international debates on corporate governance and reporting.”

Following the decision to bring forward proposals to reform the FRC, Business Minister Norman Lamb said,

"The FRC is already well-regarded both in the UK and internationally for the crucial role it plays in supporting high quality and transparent financial reporting. But by tightening its focus and streamlining its governance and structure, we believe the FRC can be even more effective.

"Government and the FRC reflected on all responses to the consultation and held further discussions with industry and investors on the detail of the proposals. The FRC will continue this dialogue with stakeholders as the changes are implemented."

 Appointments

Some aspects of the reforms do not require legislative change, in particular the FRC’s intention to group its activities around Codes & Standards and Conduct. The FRC has today announced a number of senior appointments to reflect this aspect of the reforms.

Following approval by the FRC Board, Jim Sutcliffe has been appointed as Chairman of the Codes and Standards Committee. Codes and Standards will include the areas covered by the Board’s Corporate Governance Committee (CGU), the Accounting Standards Board (ASB), the Auditing Practices Board (APB) and the Board for Actuarial Standards (BAS). Jim is currently Chairman of the Board for Actuarial Standards.

On the commencement date of the legislation, the Codes and Standards Committee will be supported by three councils. They will advise on Accounting, Audit & Assurance and Actuarial matters and will be chaired by Roger Marshall, Nick Land and Olivia Dickson respectively. Until then the relevant Operating Bodies will remain in place.

Richard Fleck has been appointed Chair of the Conduct Committee. The Conduct Division of the FRC will cover supervisory and disciplinary matters and encompass the areas covered by the Financial Reporting Review Panel (FRRP), the Professional Oversight Board (POB), the Audit Inspection Unit (AIU) and the Accounting and Actuarial Disciplinary Board (AADB). Nick Land will take over from Richard Fleck as Chair of the APB on 1 April 2012.

Within the FRC executive team, Melanie McLaren was recently appointed as Executive Director of Codes and Standards and will begin on 11 June. Michelle Sansom, currently a Project Director within the Accounting Standards Board, has also been appointed as Director of Accounting and will start in this role on 6 April.

Paul George, current Director of Auditing, has been appointed as Executive Director of Conduct. Paul will have overall responsibility for supervisory and disciplinary matters, including the work currently undertaken by the FRRP, the POB and the AIU and the AADB.

Commenting on these appointments, FRC Chairman Baroness Hogg said,

“The appointments of Jim Sutcliffe as Chair of the FRC’s new Codes & Standards Committee and Richard Fleck as Chairman of the Conduct Committee will help the FRC Board provide greater direction and coherence to the FRC’s work to the benefit of the investor, business and professional communities.

“We will continue to work closely with our stakeholders to ensure that those aspects of the regulatory framework which we are responsible are effective and proportionate. We will support the professional bodies in their crucial role in maintaining high standards of behaviour by their members. And we will take full account of the views of our expert accounting, audit and actuarial councils, which remain an essential part of the new structure.”

FRC future structure and regulatory procedures

Proposals to Reform the Financial Reporting Council: A joint Government and FRC response

The consultation closed on 10 January 2012. The consultation documents are below:

Consultation on the future role of the Financial Reporting Council

Proposals to Reform the FRC: Consultation Stage Impact Assessment

Click below to view the responses to the consulation:

http://www.frc.org.uk/about/frcreform-consultation-responses.cfm