Purpose
The Regulatory Standards and Codes Committee (the ‘Committee’) shall be responsible for approving and overseeing on behalf of the Board high quality, effective and proportionate Standards, Guidance, SORPs, Practice Notes and Codes for corporate governance, stewardship, audit and assurance, actuarial, and corporate reporting work.
Membership
The Committee is a formal business Committee of the Board.
Members of the Committee shall be appointed by the FRC Board of Directors. Membership shall comprise:
- The Chair of the Committee
- Other non-executive Directors of the FRC
The Committee shall have a majority of members who are not practising accountants, auditors and/or actuaries and no member shall be:
a) a member of the Conduct Committee;
b) a practising auditor or an individual who has during the previous 3 years
i. carried out statutory audits;
ii. held voting rights in an auditing firm;
iii. been a member of an administrative management or supervisory body of an audit firm; or
iv. been a partner, employee or otherwise contracted by an audit firm.
v. an officer of any of the accountancy or actuarial professional bodies.
Quorum
A meeting shall be quorate when at least 60% of the total membership of the Committee are in attendance. Attendance is considered to be the ability able to hear, speak and vote at the same time as other members.
Decisions of the Committee will be taken by majority. In the case of equal votes, the Chair of the Committee will have a casting vote or can refer the matter up to the full Board for further consideration.
Secretary
The Company Secretary or his/her nominee shall act as Secretary of the Committee (the Secretary).
Frequency of Meetings
The Committee shall meet as required to fulfil its remit and at least four times a year within each calendar year. The Committee may consider and decide urgent matters through correspondence. Written resolutions of the Committee shall be recorded by the Secretary.
Attendance at Meetings
Only members of the Committee shall have the right to attend Committee meetings. However, the relevant executive director and policy director will normally be invited to attend all Committee meetings and other individuals including Senior Advisors or members of Advisory Panel and external advisers may be invited to attend all or part of any meeting as and when appropriate. Observers may be invited to meetings.
Notice of Meetings
Meetings of the Committee shall be convened by the Secretary at the request of any of its members. Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed and supporting papers, shall be forwarded to each member of the Committee and any other person required to attend, no later than 5 working days before the date of the meeting.
Minutes of Meetings
The Secretary shall minute the proceedings and resolutions of all meetings of the Committee, including recording the names of those present and in attendance. Minutes of Committee meetings shall be circulated to all members of the Committee and to the Board and, following approval, published on the FRC website.
Responsibilities
The Committee shall, in relation to corporate governance, stewardship, audit and assurance, actuarial, and corporate reporting work be responsible for:
- The development and maintenance of regulatory standards and codes
- Monitoring progress against agreed KPIs;
- Approving policies and processes for developing and issuing regulatory standards and codes;
- Approving Guidance, Practice Notes and ‘thought leadership’ in relation to regulatory standards, codes and corporate reporting;
- Approving commission of internal reviews and the issue of consultation documents and reviewing / recommending final standards and codes to the Board for approval;
- Approving minor, non-contentious amendments to regulatory standards and codes (barring accounting standards);
- Advising the FRC Board on recognition of SORP-making bodies and issuing a Statement on a SORP when the FRC’s role is referenced in legislation;
- Advising the FRC Board on the FRC’s oversight of the UK Endorsement Board;
- Identifying the current, emerging and potential risks, assessing risks and recommending the adequacy of actions to mitigate those risks;
- Providing input to the development of FRC Annual Plan and Budget and FRC strategy including the implementation of the workplan as endorsed by the Board;
- Providing input into the key messages to be included in the FRC reports on its activities;
- Approving the issue and maintenance of FRC taxonomies, including for consultation;
- Performing such other functions as shall be determined by the Board from time to time.
Reporting Responsibilities
The Committee Chair shall report to the Board on the Committee’s proceedings at each Board meeting. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit.
The Committee Chair shall make a statement in the FRC Annual Report about its activities including the frequency of, and attendance by members at, Committee meetings.
Other
The Committee shall review its own performance and terms of reference and the performance and terms of reference of the Councils from time to time and report to the Board and shall implement and/or recommend any necessary changes.
Approved by the FRC Board with effect from 1 January 2021.