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FRC Annual Report and Accounts 2024/25

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1. 2024/25 highlights

April

Actuarial Standard Technical Memorandum (AS TM) 1 update on statutory money purchase illustration guidance

May

Pre-consultation engagement for the 2026 Stewardship Code

June

Stakeholder engagement roundtables on the Assurance of Sustainability Reporting Market Study

July

Formal creation of our Market Intelligence & Insights (MII) and Digital Reporting & Taxonomies (DRT) departments
NHS Audit Market Study launch
FRC Annual Report and Accounts published
Publication of Annual Enforcement Review
Annual Review of Audit Quality

August

Consultation on revised Financial Reporting Standard (FRS) 102 Going Concern guidance
Digital Reporting discussion paper
Opening of FRC Birmingham office

September

New editions of all UK & Ireland accounting standards (FRS 102) published
Finalisation of Technical Actuarial Standard (TAS) 200
Annual Review of Corporate Reporting (2023/24)
Publication of the Local Audit Backlog Rebuilding Assurance accessible guide
Publication of letter on external private capital and audit firms

October

Publication of our emerging findings from the Assurance of Sustainability Reporting Market Study

Street scene in Birmingham showing modern architecture including the glass Selfridges building on the left and the Bullring tower in the background, with people walking on the pavement.

November

Stewardship Code consultation launch
Audit Quality Inspection report of Major Local Audits
Announcement of Chartered Institute of Public Finance and Accountancy (CIPFA) Local Audit qualification recognition
Publication of Local Audit Backlog Disclaimed Opinions accessible guide
Annual Review of Corporate Governance Reporting
Annual update to the Secretary of State for Business and Trade on remit and outlining 2025 priorities to support UK economic growth

Close-up of a person's hands using a calculator, with a pencil, eyeglasses, and business documents on a desk, suggesting financial work or calculations.

December

Annual competition update
NHS Audit Market Study interim findings
Annual Review of FRS 101
Tier 2 and Tier 3 Audit Firms Audit Quality Inspection and Supervision report
Draft Plan and Budget and 3-Year Strategy
FRC assumes governance of the Wates Principles for Large Private Companies

January

Thematic review of Climate-related Financial Disclosures (CFD) by Alternative Investment Market (AIM) and large private companies
Launch of campaign to support UK Small and Medium-sized Entities (SMEs) to grow and scale

February

Final report from our Assurance of Sustainability Reporting Market Study
Announcement of 2025's Stewardship Code signatories, with 297 signatories to the Code representing £52.3 trillion assets under management
Updated guidance to support going concern reporting
System leadership of Local Audit transferred to the Ministry for Housing, Communities and Local Government (MHCLG)

2. Statement by the Chair

Headshot of an older man with glasses, wearing a suit and yellow tie, smiling slightly.

I am pleased to present the Financial Reporting Council's (FRC) 2024/25 Annual Report and Accounts. Over the course of the last year, the FRC has renewed its commitment to serving the public interest and supporting economic growth through our work on corporate governance, corporate reporting, audit and actuarial policy.

We have seen a lot of progress this year, the first full year with Richard Moriarty at the helm since he joined us in October

Our new 3-Year Strategy 2025-28, published in March, demonstrates our commitment to being at the forefront of protecting the public interest and underpinning trust and confidence for our stakeholders. Our colleagues across the FRC aim to live up to this commitment every day through our values, our purpose, and our objectives.

A strong and vibrant UK business environment is built on three pillars: well-run companies with strong governance arrangements producing high-quality disclosures, a system of external assurance which ensures investors have the confidence to place their capital in the UK, and a regulator that maintains the high standards required to support this.

We strongly support the government's priority of maintaining the UK's status as a leading global destination to build and scale a business, and will continue working together to put in place the right business environment to drive long-term economic growth. To do that, access to a quality audit, alongside good corporate governance and reporting, underpins the confidence that supports companies in more readily accessing the capital they need to grow and create jobs and wealth in every community and region in the UK.

The announcement of legislation to support audit reform is recognition of the importance of addressing the remaining gaps in the UK's regulatory framework to support the government's growth mission. We will be supporting our colleagues in government in getting this legislation onto the statute book, and want to remain close to those with an interest in our work as our toolkit is modernised through statutory powers. However, it remains for ministers in the Department of Business and Trade (DBT) to determine the specific detail of the legislation and its impact on the wider UK corporate landscape.

We remain committed to being a modern regulator, and the work demonstrated in this Annual Report truly reflects this.

Sir Jan du Plessis A handwritten signature in black ink. Chair

3. The FRC at a glance

The FRC has an important public interest role to enhance the quality of audit, corporate reporting and governance, while supporting the UK's economic growth and its international competitiveness. The FRC's Board and executives remain focused on ensuring our current regulatory toolkit is used to best effect, including working closely with our stakeholders. This includes setting proportionate standards, fostering a culture of continuous improvement and holding those that fall short to account. This is important for stakeholders, large and small, across the country, from workers and pension holders to institutional investors and large corporate organisations. For more about our stakeholders and how we engage with them, see page 25.

Building trust brings better outcomes for all stakeholders. This diagram illustrates how a strong independent regulator underpins the system:

Rigorous audit and Market confidence feed into Acting in the public interest.
Engaged investors and Better reporting feed into Acting in the public interest.
Better outcomes are achieved through Better governance.
All these elements lead to Better outcomes for all stakeholders.

Our objectives

This diagram outlines the FRC's four objectives:

Objective 1: The standards and expectations we set will enhance corporate governance, corporate reporting and investor stewardship in a manner that supports UK economic growth and investment.
Objective 2: Our proportionate regulation of accounting, audit, assurance and actuarial work will expect and encourage high quality by those responsible, acting as an improvement regulator and dealing effectively and fairly with cases where there are significant or serious shortcomings.
Objective 3: We will build on our deep understanding of corporate reporting and the audit and actuarial markets we oversee, and by being agile, we will identify and prepare for opportunities and challenges on the horizon.
Objective 4: We will be a modern organisation – continuously learning, improving, and considered by others as a respected, effective and highly engaged regulator and by our colleagues as an inclusive and great place to work.

4. Our renewed purpose

The purpose of the FRC is to serve the public interest and support UK economic growth by upholding high standards of corporate governance, corporate reporting, audit and actuarial work.

This year, we have made three changes to our previously stated purpose:

To better reflect the increased focus the government has placed on regulators supporting economic growth. This is something that was previously implicit in the FRC's purpose, but we consider it appropriate to make this link explicit.
To make explicit the breadth of our remit across professions, which includes actuaries in addition to auditors and accountants.
We have removed the previous reference in our purpose to ‘[holding to account those responsible for delivering] high standards of governance, financial reporting and audit' owing to it being part of 'how' we achieve our purpose rather than it being viewed as an 'end' in itself.

Why our purpose matters

The FRC's work helps underpin trust and confidence in companies from stakeholders, such as investors, creditors and employees, and the communities in which they operate. This enables companies to attract investment, as well as the broader support they need to grow and prosper in the long term. Our work contributes directly to UK economic growth while, in turn, protecting the public interest of those stakeholders who rely on good quality corporate reporting and audit to support their own informed decision-making and/or financial interests.

Poor quality governance, corporate reporting, audit and actuarial work can contribute to misinformed decision-making, disorderly corporate failure and avoidable costs for a range of stakeholders. Those affected include investors, creditors, employees and pensioners, in addition to broader impacts on supply chains and local communities. It is important to stress, however, that a growing, vibrant and innovative economy demands market entry and exit driven by risk-taking with capital. It has never been our role to prevent corporate failure and market exit.

We recognise the sectors we regulate include corporates, audit firms and investors that operate on an international rather than national basis. By engaging with international peers and standard-setting authorities, we influence international standards for the benefit of UK stakeholders.

5. Our business model

Our five priorities to support economic growth

Underpin investor and broader confidence in UK plc, which enables businesses to attract capital and grow.
Embed the principle of proportionality in our work and identify and address unnecessary burdens on business.
Understand the markets we oversee to identify whether they work effectively to support growth.
Identify key future trends and innovations in the markets we oversee that businesses and regulators should be well positioned for.
Work with others to support the future skills and resilience of the professions needed for the markets we oversee.

What kind of regulator is the FRC?

The FRC expects and encourages high standards, and our focus remains on audit quality and underpinning the trust and confidence of those who rely on corporate reporting.

This diagram illustrates "The Four Faces" of the FRC as a regulator:

System partner: Educating, collaborating, and supporting continuous improvement.
Supervisor: Supervision and monitoring of requirements, culture and behaviours.
Facilitator: Encouraging good practice through structured engagement.
Investigator and enforcer: Investigating and enforcing conduct and applying proportionate sanctions.

Our values

This diagram outlines the FRC's values:

Influential: Through technical expertise and thought leadership, our people innovate to drive change. They develop themselves and others, speak up, value diversity and support others to do the right thing.
Fair: Our people act in a professional, proportionate, consistent manner to ensure robust standards of decision-making and delivery, both internally and externally.
Effective: Our people are decisive, accountable and collaborative when working with others to share information and experiences to improve outcomes.
Independent: Our people challenge ideas, make evidence-based decisions and always act with integrity.

What we do

Standards and expectations

The UK's reputation for high standards of governance, corporate reporting and investor stewardship has been widely credited as a source of competitive advantage for international investment. The challenge for the FRC is to strike an appropriate balance between two things:

Enhancing the quality of corporate information, which benefits users and the preparers of this information if it offers them better access to capital to grow.
Avoiding unnecessary burdens and costs while doing so.

Our support for the government's growth mission has sharpened our focus on proportionality to ensure that any additional requirements are well-designed, targeted and no more than necessary. We are also reviewing existing requirements and guidance to determine whether they can be withdrawn or reduced. The FRC has continued to operate in this way over the past year. For example, in early 2024, this approach supported the conclusion of our largest ever consultation on the UK Corporate Governance Code. We applied the same approach again for our consultation on the Stewardship Code, which relates to asset owners, asset managers and investment service providers.

Audit and assurance regulation

The health of the UK economy needs to be underpinned by a robust and well-functioning audit market that is supported by appropriate levels of audit quality that instil trust and confidence in users of financial statements. This is a strong platform on which to build and is a shared vision with firms, professional bodies and investors.

Audit quality has improved in recent years, as firms have invested in people and quality management systems. This year, we undertook a survey of audit professionals that showed they view improvements they have made, such as a focus within firm culture on quality, and our independent oversight regulation, as having had a significant impact on enhancing quality.

Agile approach

Anticipating market trends and preparing for future opportunities and challenges requires a deep understanding of the markets we oversee. This understanding enables us to adapt our policies to align with the needs of a changing market. By actively monitoring trends and challenges, the FRC is better equipped to respond to emerging risks and opportunities, ensuring that the regulatory environment remains relevant and continues to support economic growth and investment.

Modern organisation

We want to earn respect for being a best-in-class regulatory authority, and we think good stakeholder engagement is central to this. The nature of regulatory decision-making means it is not always possible to agree, not least because different stakeholders may hold opposing views on some matters. Nevertheless, we believe that by engaging with stakeholders we are better able to develop effective, pragmatic and proportionate policies that serve the public interest and support UK economic growth. Stakeholders have told us they value the informal outreach ahead of formal consultations we have trialled in the last year, and we will continue to deploy this approach going forward.

One way we can learn and support those we regulate to adapt to these changing trends is through our Audit & Assurance Sandbox. The Sandbox is a collaborative and innovative approach to identifying and developing solutions to technical and policy issues in the audit and assurance space. It has had success in several areas and resulted in valuable outputs such as additional guidance on the Objective and Reasonable Informed Third Party test and support to clear the local audit backlog. Building on this success, we will expand the Sandbox to all areas of our remit. This will focus on practical, innovative solutions which address the key themes stakeholders are most interested in and which are most likely to have an impact on UK growth and competitiveness.

To be successful, we need to be able to recruit and retain the necessary skills to support our strategy and continue to promote an inclusive and diverse organisation. We will need to invest in our people through learning and development, and by developing a new approach to performance management. We want a step change in how we use and exploit technology, data and information management within our organisation.

6. Chief Executive's report

Headshot of a bald man with glasses, wearing a blue blazer and sweater, looking directly at the camera.

Following my first full year as CEO, I welcome the opportunity to reflect on where we are as an organisation, and where to further direct our efforts to develop our purpose of serving the public interest and supporting economic growth, by upholding high standards of corporate governance, corporate reporting, audit and actuarial work. When regulation is designed well, it can do just that; but at the same time, we must ensure that regulation remains proportionate, necessary, and fit for purpose.

We share the government's priority in maintaining the UK's status as a global destination to build and scale a business. Businesses need access to capital and broader stakeholder support in order to grow and thrive; this requires capital providers and other stakeholders to have trust in the underlying reporting and assurance environment. Access to quality audit, alongside good corporate governance and reporting, underpins domestic and investor confidence, which in turn supports well-run companies in more readily accessing the capital they need to grow and create jobs and wealth in every community and region of the UK.

One way we have supported this is through our changes to the UK Corporate Governance Code and our review of the Stewardship Code. Our principles-based approach to corporate governance updated in the 2024 UK Corporate Governance Code, underpinned by proportionality, gives investors confidence and certainty to invest in the UK. With an effective date of 1 January 2025, we have worked with stakeholders to ensure that this is fully embedded before reporting begins in 2026.

In turn, the UK Stewardship Code plays a vital role in promoting long-term value for millions of people who trust their hard-earned savings and pensions to the investment community to provide for their future. When published later this year, the updated Code will remove reporting expectations that do not add additional information or transparency, and will come with guidance to demonstrate different approaches to applying the principles and what good reporting looks like.

Earlier this year, we also shared the key observations from the pilot phase of our actuarial monitoring programme, which allows us to assess the effectiveness of the application of actuarial standards, ensuring they are proportionate and outcomes focused. By enhancing the quality of actuarial work being carried out by practitioners, we have been able to support growth through greater investment particularly in the insurance and pensions sectors, which in combination manage investments of over £4 trillion of assets.

There are also a number of areas we have been looking at in more detail this year relating to our audit work. Audit quality in the UK compares favourably internationally, but it remains a key priority for the FRC to enhance the resilience of the UK audit market. While quality continues to show improvement at the largest firms, there is a persistent gap between these and others. We must therefore remain vigilant and drive for continuous improvement to ensure that quality improves across the whole of the market.

Through our engagement with stakeholders across business and the audit profession, it's clear to us that some SMEs face challenges in securing audit services at a proportionate cost, potentially impacting their ability to grow. We've therefore been considering how the audit market is working for SMEs, and how we can embed the principle of proportionality for SME audits.

The use of Artificial Intelligence (AI) has the potential to significantly impact the financial services industry, including the markets and firms we oversee. We must therefore ensure that we are looking at how it impacts our stakeholders as well as ourselves. Our 3-year Strategy focuses on AI and technology as a priority area for us to address as a modern and agile regulator.

We are also seeing changes in the nature of the capital structures of audit firms across the whole of the market. Our letter, issued in September 2024 and updated in March 2025, made clear that these transactions are complex for firms, and so we expect them to engage with us early to reassure us that any proposed structure will be able to support the public interest, the independence dimensions of audit, and all applicable regulatory requirements.

We have continued to progress our programme on the memoranda of understanding with overseas regulators for mutual recognition of progressional qualifications, allowing third-country auditors to apply for audit rights in the UK and vice versa. This supports the UK professions' skill base and resilience, reducing unnecessary burdens on auditors, and supporting UK firms and professional bodies to trade globally. Due to work over the last year, we have secured recognition with Australia, New Zealand and Switzerland, with more close to being secured.

One major development on the horizon is the expected draft Audit Reform and Corporate Governance Bill. We very much welcome the government's commitment to bring this legislation forward.

We know that the UK's corporate landscape has moved on since the original legislative proposals in 2021: audit quality has improved, conflicts of interest among the largest firms have been addressed, UK corporate governance has been strengthened, and the FRC is already a more effective regulator. One example of this is the confirmation in October that the four largest audit firms had concluded the transitional voluntary three-year period of operational separation, an initiative to ensure that audit practices are focused above all on delivering high-quality audit in the public interest.

However, we recognise the importance of the proposed draft audit, reporting and corporate governance legislation, placing the FRC on a similar statutory footing to other regulators and ensuring all stakeholders have confidence in the regulatory sector. There remain important loopholes to be closed by modernising our regulatory powers, and we will remain close to those with an interest in our work as we transition to the Audit, Reporting and Governance Authority (ARGA). While still maintaining a flat headcount, we have continued establishing our presence in Birmingham with our new office officially opening in August

It now accounts for 10% of our overall workforce, with recruitment to roles as they become vacant in London being offered in Birmingham wherever appropriate, including that of Vinita Hill, our new Chief Operating Officer. This demonstrates our commitment to having a presence in regions across the UK and reflects the geographic spread of our stakeholders.

Our ongoing goal of being an improvement regulator is not just about our influence with audit firms and UK plc, it also applies to ourselves. Our new 2025-28 3-Year Strategy looks at what we need to do to pursue that purpose, underpinned by our values and strategic objectives, but that is not to say that there isn't much for us to be proud of already.

Richard Moriarty A handwritten signature in black ink. Chief Executive Officer (CEO)

In support of UK growth

Our work helps to maintain trust and confidence in companies from a range of stakeholders including investors, creditors, and the communities in which they operate. This enables those companies to attract investment and support they need to grow and prosper in the long-term. In turn, this means that our work contributes to protecting the public interest of those stakeholders who rely on good quality corporate reporting and audit to support their own informed decision making and financial interests.

We provided our annual update to the Secretary of State for Business and Trade in November 2024, which specifically outlined our five priorities to support growth, and we ensure that our work continues to embody these. However, to provide the best support for companies to grow and scale, our regulation must not be overly burdensome and so, when we recognise a need for change, we endeavour to provide updates to support this in a timely way.

In the course of the last year, we have provided an update to TAS 310 in relation to collective money purchase schemes and to TAS 300 in relation to the use of surplus in defined benefit schemes and superfunds. These amendments support the development of these emerging areas and increase public confidence in these markets.

We completed the periodic review of FRS 102 in March 2024, but in response to stakeholder needs, we developed and updated materials to support the implementation of our amendments to the standard. These ensure that, while the amendments were designed to enhance the quality of UK financial reporting and help support access to capital and growth of businesses applying them, preparers are able to plan for the amendments effective for accounting periods beginning on or after 1 January 2026.

Following government's changes in legislation to increase company size thresholds in December 2024, we have issued a package of guidance and amendments to existing standards and guidance to assist with implementation, draw attention to the changes and help smaller companies understand the financial reporting options that may now be available to them.

The strength of governance in UK companies is something we can be proud of, and is an important enabler of economic growth. Companies have begun to implement the revised Corporate Governance Code from January 2025, which has taken a streamlined approach, withdrew about 20% of previous guidance issued, and dispensed with other additive proposals. Our most recent review of corporate governance reporting in November 2024 found that 28 of 100 companies examined chose to depart from the Corporate Governance Code, making use of the comply or explain approach. This demonstrates that companies are able to choose an approach that works for them, provided that this is explained clearly through the annual report.

For audit firms, we understand that part of attracting investment and therefore encouraging growth can mean the use of capital restructuring via private capital. In the right circumstances, this can generate additional investment that enhances audit quality and drives innovation, choice and competition in the audit sector. As a result, we issued a letter in September 2024 outlining our position, and provided an update in March 2025 given the continued market interest in the topic. We also focus on audit quality through our continued audit firm inspections for both Tier 1 firms and Tier 2 and 3 which emphasised the importance of delivering consistent levels of audit quality, the need for strengthened commitment to continuous audit quality improvement, and the reduction of the widened gap between the largest four firms and the rest of Tier

As well as this, we published our report on the quality of major local audits, recognising the vital role that local auditors play in their communities. Our enforcement work over the course of the last year reinforces this focus by upholding high standards which in turn creates confidence in financial reporting and drives growth for the benefit of society as a whole.

Our role as an improvement regulator

In recognition of our role as an improvement regulator, we have continued to look at ways in which we can ensure we are maintaining high standards while reducing regulatory burden. One major piece of work in this space was the launch of the Stewardship Code consultation in November, looking at ways we could improve on the 2020 Code. While implementation of the new Code is expected in the coming year, it will promote improved transparency, disclosure and accountability in the stewardship ecosystem, maintaining its reputation for supporting high-quality stewardship.

We hold ourselves to the same standards as we do our stakeholders, and so we have made improvements within our own organisation. Last July, following a strategic review of some of our functions, we created our new Market Intelligence & Insights (MII) and Digital Reporting & Taxonomies (DRT) teams. The MII team gives us an even stronger capability to understand the markets relevant to us and the potential impact of our work on them, while the DRT team enhances our thought leadership and policy work in the rapidly evolving digital reporting landscape.

We are also working on improvements to the future of audit regulation through two projects looking at our own processes and procedures: the Future Audit Supervision Strategy (FASS) and our End-To-End Enforcement Process Review (E2E). We are keen to assess our regulatory approach to ensure it remains fit for purpose now and in the future, and through these projects we aim to underpin consistent quality performance while also reducing regulatory burdens.

To ensure we are assisting our stakeholders in the application of our work, we produce Frequently Asked Questions (FAQs) and myth busters on matters such as FRS 102, carry out quality reviews in areas such as listed company digital reporting to support in driving up the quality of the data so that it can be relied on for decision making, and provide oversight and support in areas such as changes to FRS 102 to promote high quality reporting and consistency within sectors.

We continue to publish thematic reviews to aid stakeholders in making improvements to their own reporting, such as on offsetting in the financial statements and International Financial Reporting Standards (IFRS) 17 insurance contracts and on climate-related financial disclosures by AIM and large private companies as well as on the International Standard on Quality Management (ISQM) 1 root cause analysis and ISQM 1 network resources and services providers. We also published our 'What makes a good environment for speak-up and internal challenge' report, summarising what good looks like and providing examples of good practice from our supervision work.

Our Corporate Reporting Review (CRR) team has continued to apply a proportionate, targeted approach to consideration of company annual reports and accounts and their compliance with relevant reporting requirements. It found that there was some evidence of a widening gap in reporting quality between the FTSE 350 and other companies. We recognise that companies outside of the FTSE 350 are often the engines of growth in the economy, and we cannot be complacent about lower quality reporting; these findings have therefore fed into our work to ensure we are facilitating improvement in this area.

We carried out an audit firm survey, providing comparative information to firms on how their staff perceive the environment in which they conduct audits including the quality of technology provided by the firm, the emphasis on audit quality and independence within the firms' culture, and the impact of entity management or audit committees on the conduct of an audit.

We have also seen the conclusion of a number of enforcement decision notices which highlight our focus on driving high standards through the setting and monitoring of non-financial sanctions, including root cause analyses, and through settlement of cases. Both of our KPMG/Carillion audit investigations saw full decision notices published in May, while the Oliver Clive & Co, PwC and EY audits of London Capital & Finance saw published outcomes in the same month. Encouragingly, this year has seen good examples of exceptional cooperation by firms and individuals during investigations, evidencing an ongoing commitment to self-improvement. We promote these improvements by communicating our expectations through our Annual Enforcement Review, which last year had specific chapters on proportionality and consistency in our enforcement work. We maintain a focus on timeliness and consistency arising from the growth of published outcomes, particularly those conducted under the Audit Enforcement Procedure, and we have once again exceeded our two

and three-year Key Performance Indicators (KPIs) for conclusion, settlement or closure of cases.

Proportionality and smart regulation

Our enforcement work continues to ensure we are proportionate in our approach, ensuring that there are processes, mechanisms and safeguards in place to support consistent, fair and robust outcomes. We continue to see a reduction in the size of the case portfolio as the number of new cases opened remains below the average over previous years, and our drive to conclude legacy cases and newer investigations in parallel has continued.

Areas of focus for enforcement cases are not set in stone; if indicators of breaches are identified and it would be in the public interest to investigate, we may widen the focus to other issues. This proportionate, risk focused enforcement action upholds confidence through holding those who have fallen short to a serious or significant extent to account, and deters similar behaviour in the future.

Wherever possible we remove unnecessary burden to ensure we are taking a proportionate, smarter approach across our work; our practice note on less complex entities sought to clarify requirements to support firms that audit less complex entities interpret requirements proportionately, we removed a number of provisions in the insurance actuarial standard (TAS 200) where they are addressed elsewhere, and we introduced interim reporting measures for Stewardship Code signatories while consulting on reporting requirements, addressing concerns of unnecessary reporting burden at the earliest available opportunity.

We continue to supervise the largest firms' implementation of ISQM 1, a standard that is scalable to the circumstances of the firm. This means that while firms are required to establish and maintain a system of quality management, centring on establishing quality objectives, identifying and assessing quality risks, and designing and implementing responses to them, this should be done in a way that takes into account the nature and circumstances both of the firm and of the engagements it performs.

Where our focus has traditionally been on the largest businesses, we believe there is more we can do to help the smaller end of the market. Through our work on local audit, we also provided support to implement measures to address the backlog of local body audits by pausing routine inspections of major local audits to allow auditors to focus on clearing the backlog and returning to timely reporting.

In January 2025, we launched a campaign to support UK SMEs to grow and scale, aiding in accessing audit services and reducing reporting burdens where possible. We want to see how we can help audit firms apply audit standards proportionately for smaller, lower risk and less complex companies, and so we are carrying out a market study on SMEs, providing guidance to support the proportionate audit of SMEs, as well as providing support materials for the companies themselves.

Innovation and the future

Rapidly evolving, generative AI tools are transforming the way people work, and these tools have the potential to automate tasks, improve decision-making and provide valuable insights into data and operations, if used appropriately. While our approach to AI internally is still in its infancy, we ensure that any technology we consider for use is done so responsibly, complying with applicable law, and protects the confidentiality, integrity, and availability of all data that we process.

We engage with stakeholders to better understand how they currently use technology and AI, how they might want to in the future, and if regulation is impacting this. We work to promote responsible innovation and use of technology, and issue guidance to support and encourage the innovation and use of technology. We are also assessing the potential of AI in corporate reporting, and how structured data can contribute to more effective and reliable AI use.

In October 2024, we published the revised Technical Actuarial Guidance on Models to include examples relating to using AI and Machine Learning techniques in actuarial work, enabling actuaries to produce quality work using these advanced techniques while carefully considering associated risks.

In March 2025, we announced the public beta launch of our digital reporting iXBRL viewer, a new tool designed to improve free access to structured company reporting of over three million companies. This was an important milestone in unlocking vast repositories of digital data, enabling investors, businesses, and the public to easily access and analyse company information, creating opportunities to make more informed decisions about operations and investments. We also published a cross-regulatory discussion paper, setting out the opportunities for developing digital reporting in the future; this is a cost-efficient way of making company information more accessible and transparent to stakeholders.

Engagement and collaboration

We recognise that the sectors we regulate operate on an international basis, not just domestically. That's why we engage with international peers and standard-setting authorities to continue influencing international standards to the benefit of UK stakeholders, prioritising our engagement with the sectors we regulate and the markets we operate in. This covers every size of business, pension holders, suppliers, auditors and accountants, actuaries, asset owners and managers, and ultimately, all taxpayers. We know that our stakeholders want a clear approach from us as a regulator and a rationale to accompany any changes and updates, so we endeavour to provide consistency in our messaging and output, as well as extensive direct and indirect engagement to ensure this open dialogue.

On our review of the Stewardship Code, we undertook extensive engagement ahead of and during the consultation to inform the development of the consultation proposals. We also lead the cross-regulatory project to digitise UK corporate reporting standards and regulations, alongside Companies House, the Financial Conduct Authority (FCA), His Majesty's Revenue and Customs (HMRC), the Charity Commission for England and Wales, the Irish Revenue, and staff from relevant professional services, software vendors, and industry groups.

Where appropriate, we engage with other regulators and government departments to take our work forward. On the supervision of audit, we collaborate with other regulators to hold the largest global networks to account for audit quality, and work to address issues that affect the audit market and profession globally. Our actuarial team have been engaging with the Pensions Regulator, the FCA and the Prudential Regulation Authority on our revised Technical Actuarial Guidance on Models, and with the FCA on an exploratory review on published versions of solvency assessment reports of funded funeral plans trusts. On the international stage, we influence the development of international taxonomies, in particular through participation in the IFRS Taxonomy Consultative Group, which provides input into the development of IFRS and International Sustainability Standards Board (ISSB) XBRL taxonomies.

Our colleagues are recognised across international organisations for their leadership and expertise: Claire Lindridge, Director of Audit Market Supervision, is a member of the International Forum of Independent Audit Regulators (IFIAR) Board; Elizabeth Barrett, Executive Director of Enforcement, chairs the IFIAR Enforcement Working Group; James Ferris, Director of UK Audit Policy, chairs IFIAR's Standards Coordination Working Group; Andrew Meek, Director of Audit Firm Supervision, is Vice-Chair of IFIAR's Global Audit Quality Working Group; Josephine Jackson, Director of International Audit Policy, is Vice-Chair and board member of the International Auditing and Assurance Standards Board (IAASB); and Mark Babington, Executive Director of Regulatory Standards, is a board member of the International Ethics Standards Board for Accountants (IESBA).

In our ongoing efforts to support our stakeholders, we have continued to support the DBT with its Non-Financial Reporting review. The first legislation arising from the review has now been laid and reflects advice we provided to DBT on streamlining requirements and company size thresholds. We also worked extensively with the MHCLG on local audit system leadership responsibilities and their transfer to the department, as well as with the professional body, CIPFA, on the approval of their Diploma in Local Audit as pre-approved local audit specialist training.

Of course, stakeholders remain at the heart of everything we do, and more about our approach to stakeholder engagement can be found on page 25.

7. Key Performance Indicators

In measuring our performance, a series of targets are agreed and monitored during the year. The FRC's Executive Committee (ExCo) regularly receives detailed management information which underpins each of the published KPIs. Our 2024/25 performance against some of the key measures is shown below, together with prior year performance.

Category	Measure	Target (FY)	2024/25 (FY)	2023/24 (FY)	RAG status¹
Supervision and Monitoring	Number of Audit Quality Review (AQR) inspections completed	140-150	141	137	Achieved
	Number of CRR reports opened	240-260	222²	243	Not Achieved
	Complaints against professional bodies for auditors, accountants and actuaries investigated and responded to within six weeks	98%	100%	90%	Achieved
	Constructive engagement cases concluded within 12 months	100%	17%³	38%	Not Achieved
	Public Interest Entity (PIE) auditor registration applications which do not raise any compliance issues will be processed, and a decision taken within 25 working days, of the date on which all required documentation and information has been submitted to the FRC	100%	98%⁴	100%	Not Achieved
Enforcement	Enforcement cases concluded, settled, or closed within two-year target⁵	50%	90%	53%	Achieved
	Enforcement cases concluded, settled, or closed within three-year target⁵	80%	87%	88%	Achieved
Financial and operational performance	Operating costs against budget (excluding UK Endorsement Board (UKEB))	£60.9m	£58.1m	£59.6m	Achieved
	Recruitment (staff) against budget	506	459⁶	477	Achieved
	FRC complaints responded to within service level agreement timeframe	98%	100%	100%	Achieved

8. Our people and culture framework

For the FRC to maintain its role as a modern regulator, we require a workforce of experts and professionals to guide and develop the evolution of the sectors we regulate or oversee. Fostering diversity, advancing equity and cultivating inclusion are essential to being an organisation considered by our colleagues as an inclusive and great place to work. Our Birmingham office, opened in August 2024, now accounts for 10% of our overall workforce. This includes two members of ExCo working from there on a regular basis, demonstrating our progress on having a presence in regions across the UK and reflecting the geographic spread of our stakeholders. We also moved to our new London office in the Canary Wharf area in March

Our hybrid working programme also remains in place across the organisation. This allows people to combine the benefits of working from home with time in the office, enabling collaboration no matter what a colleague's location is. We have settled into a hybrid work pattern of 40% office attendance and we see good compliance with this requirement.

Engaged colleagues

We conduct an annual people survey, inviting all colleagues to share their anonymous views to help develop and improve the way the FRC works, as well as identify key issues, priorities for improvement, and areas of success and good practice. Feedback from the survey is considered by the People Committee and ExCo. Key areas of focus for 2024/25 include looking at a more joined-up approach to working across the FRC, increasing the visibility of ExCo, embedding and upholding our values and behaviours, and supporting and enabling change.

We bring together colleagues from our London and Birmingham offices through our monthly town halls, which are held in a hybrid format, as well as at divisional and team meetings. These sessions give us the opportunity to engage with and hear from colleagues on business updates aligned with our strategic objectives, as well as highlight work and projects from across the business. Colleagues are given the opportunity to raise any questions they may have, and sessions are recorded to ensure everyone has the chance to engage in a way and at a time that suits them.

All FRC staff are entitled to two days of paid volunteering or Corporate Social Responsibility leave per year. Over the course of the last year, colleagues across the FRC have made use of 918 volunteering hours, equating to 131 days and providing support to 20 different schools and organisations.

We remain committed to the wellbeing of our colleagues, providing access to online GP services and physiotherapy, counselling and legal advice services. We also host webinars and workshops to support health and wellbeing.

We provide a healthy and safe working environment for all of our colleagues and visitors. We have a dedicated team of fire marshals, first aiders and mental health first aiders to support colleagues and record any incidents. Per employee, the average working days lost to absence for the 12 months to March 2025 was 5.7 days (2024: 4.2 days).

Learning, development and talent

We continue to allocate six days per year for each member of staff's learning and development activities, with the potential for more with the agreement of an individual's manager. We provide a wide range of learning and development activities, from mandatory and technical training to support continuous knowledge and professional development, to internal and external programmes to develop leadership.

Of 463 employees, 252 are members of professional bodies and 32 are working towards professional qualifications.

Over the last year, attrition has remained low, with a voluntary turnover of 9.4% and an involuntary turnover of 3%. We have also had 15 members of staff return from maternity or parental leave. Of the 44 vacancies filled in 2024/25, 18 were internal appointments, demonstrating our commitment to providing opportunities for our people to develop their careers.

Our Empower Programme, launched in September 2024, is a development initiative tailored for job level 1 and 2 employees, our most junior grades. It focuses on developing core skills such as communication and presentation skills, building networks and community, and career planning. Over the course of six months, participants receive one-to-one coaching sessions and workshop learning from staff at job levels 3 and 4 who have graduated from our Aspire Programme.

Our Aspire Programme supports 20 minority ethnic colleagues at job levels 3 and 4 for leadership roles through a nine-month career development programme. Participants receive a structured programme of leadership development, as well as a tailored career plan to work towards meeting their career goals.

Diversity, equity and inclusion (DE&I)

We recognise that a diverse and inclusive workplace is not only the right thing to do, but is also essential for driving innovation, employee engagement, better decision-making and improved outcomes. We have updated our DE&I strategy for 2025/27, which reflects this and reaffirms our commitment to embedding these values in everything we do at the FRC.

Our gender pay gap now sits at 2.2% (median figure), and our mean figure has improved from 10.4% to 9.6%. Since we began reporting in 2018, the mean pay gap has reduced from 27.8%, a reduction of 64%. The mean gender pay gap reflects the increasing number of women at all job levels in the organisation, including in five of the seven positions on our ExCo.

Our DE&I Committee coordinates and champions the various networks that exist across the organisation, and ensures alignment of these groups with the DE&I strategy. The FRC is Menopause Friendly, Disability Aware, and a signatory to the HM Treasury Women in Finance charter.

As part of our ongoing commitment to support talent development, social mobility and early careers at the FRC, we offer initiatives including our work experience programme, promote external mentoring opportunities and organise career insight visits with the East London Business Alliance. In recognition of our apprentices and the contribution they make across our organisation, we launched our Apprenticeship of the Year award in 2024 as part of National Apprenticeship Week and awarded the second recipient in February 2025.

9. Section 172 and stakeholder engagement

Section 172 of the Companies Act 2006 (the Act) requires directors to consider the interests of stakeholders in their decision-making. In particular, section 172(1) states that regard should be had to:

The long-term consequences of decisions.
The interests of the company's employees.
The need to foster the company's business relationships with suppliers, customers and others.
The impact of the company's operations on the community and the environment.
The desirability of the company maintaining a reputation for high standards of business conduct.

Our direct stakeholders include companies, institutional investors, auditors, actuaries, accountants, and their respective professional bodies, regulators, and the government. Our indirect stakeholders include retail shareholders, suppliers, employees, customers, communities, pensioners and savers, and financial institutions. All of our stakeholders have an interest in the health of companies and other organisations within our existing and future regulatory scope, and in the success of the UK corporate sector as a whole. The directors are fully aware of their responsibilities to promote the success of the company in accordance with section

Consideration of stakeholders' interests has always been integral to the work of the FRC and its decision-making. Our Stakeholder Engagement & Corporate Affairs team continues to deliver high-quality engagement with our stakeholders and increase the reach, engagement and targeting of our communications and activity.

Our approach to stakeholder engagement

Our approach to stakeholder engagement focuses on:

Creating a network of advocates.
Soliciting senior-level input.
Positioning the FRC as a leader in key debates.
Gathering input into policymaking and consultations.
Driving awareness and engagement with our Codes and best practices.
Ensuring that the FRC is a part of relevant decision-making bodies and groups.

We actively engage our stakeholders throughout the year to understand their views on a variety of topics.

Board consideration of stakeholder matters

The Board and ExCo received regular briefings on stakeholder engagement, insights, and risk and reputation management during the year. The Board carefully considers the impact of its decisions on stakeholder groups and the directors acknowledge that, as an independent regulator with a public interest remit, its decisions will not always be supported by all stakeholders. Major policy issues are subject to consultation and responses are carefully considered to inform decision-making, with due process on consultations relating to matters of public interest. Feedback statements are issued following consideration of consultation responses, and these are published on our website.

The Board has a process in place for decision-making, taking into account the FRC's strategic objectives, culture, and values to ensure it has confidence in the decisions it makes. Our board paper templates and information provided to the Board reflect the likely long-term impacts on our stakeholders, setting out the relevant issues and how they have been considered during discussions. The Board also works to ensure that its decisions are consistent. Regular updates are provided to the Board on key actions that have been undertaken. When making key decisions, the directors also have regard to the need to foster the company's business relationship with suppliers, customers and all other stakeholders in our supply chain.

The success of the FRC is dependent on strong engagement with all of our stakeholders, and we recognise their valuable contribution to our work. Some particular highlights from this year include:

Extensive engagement on revisions to the Stewardship Code, taking part in or hosting over 60 events during the pre-consultation and consultation phases of work, and engaging with over 1,500 stakeholders.
Implementation of the Digital Reporting Viewer to improve free access to structured company reporting data, improving access and usability of financial reporting data for our stakeholders.
Approval and publication of the 2025/26 Plan and Budget, following consultation with stakeholders.
The board strategy day to review delivery against our strategic objectives and to manage and understand our stakeholders' interests.
An event for the FRC's Non-Executive Advisers, a vital component of the governance structure, to update them on current and ongoing developments.
Our updated priorities and remit letter to the Secretary of State for Business and Trade.

The Stakeholder Insight Group (SIG) represents preparers, investors and other key parts of our stakeholder universe including reporting framework owners and civil society groups. The SIG forms part of our strategic approach to stakeholder engagement, through which we keep track of emerging themes affecting stakeholders in UK business.

Our Chair, CEO and Executive team meet directly with our key stakeholders and also participate in events, roundtables and other forums. To deliver our objectives, we actively engage with ministers, MPs, peers and other government departments and executive bodies, as well as other regulators and regulatory partners.

The Board regularly engages with employees and the wider workforce through the People Forum, as well as the annual People Survey to identify key issues and priorities for improvement. Most recently, the Board had its first set of meetings at our Birmingham location, as well as a meet and greet with colleagues based there.

10. Environmental impacts and ESG

You can find our disclosures on the following pages:


Data handling and data security	p29	Ethics and compliance	p29
Employee engagement	p23	People and culture	p23
Professional Integrity	p30	Environmental issues	p27

Environmental impact

Governance

The FRC Board has ultimate responsibility for the FRC's consideration of, and response to, climate change and other environmental issues, and considers environmental implications in setting the UK Corporate Governance Code. The Board has delegated to the Audit & Risk Committee responsibility for reviewing current and emerging risks to the FRC's strategy and objectives, including climate-related risks.

Strategy

The FRC recognises the growing demands for meaningful, assured and comparable sustainability reporting and the significant implications that these demands will have for businesses and investors in the UK.

We support our sustainability and environmental initiatives through our role as Secretariat to the UK Sustainability Advisory Committee and the UK Sustainability Disclosure Technical Advisory Committee, established in May 2024 to support high quality sustainability reporting.

We consider carefully what disclosures we request as a regulator and will continue to work closely with stakeholders in responding to a changing regulatory and reporting landscape.

In this report we have made voluntary disclosures in relation to paper and plastic use and business travel. We will continue to assess the quality and maturity of climate-related disclosures and publish additional data on our environmental impact, related to our locations in Birmingham and London, in future reports in line with Government commitments.

Risk assessment

Our current assessment, within our overall risk framework, is that we as an organisation are not significantly exposed to the physical risks of climate change in the short and medium term and that climate change does not represent a specific threat to our viability or ability to operate.

We do, however, take account of the potential impact of climate-related disruption, for example to travel or power supply, in setting and testing our business continuity policies and procedures.

Energy efficiency metrics

The FRC's locations in London and Birmingham each occupy one floor of multi-tenanted, externally managed buildings. As such, we are unable to make unilateral changes to the energy and water systems, which makes it challenging for us to set attainable quantitative targets for the reduction of our own electricity, gas and water consumption.

We have not included emission estimates for our recently occupied Birmingham office or recently vacated site at London Wall in this report. We will provide appropriate data in future reports that enable us to provide meaningful energy usage and emissions comparators.

In making plans to reduce our consumption, we remain mindful that cloud computing is capable of significantly improving energy efficiency and reducing greenhouse gases compared to traditional local servers. We have moved all business application services to the cloud apart from Microsoft SQL Server. Our estate of internal systems is largely reduced, and business applications are now in the cloud.

For the greater part of the spaces we occupy in Birmingham and London, lights have been changed from incandescent, halogen, and fluorescent light bulbs and tubes to more efficient and environmentally friendly LED lighting. Old lights were properly disposed of by a specialist firm.

Other metrics

We also collect data on single-use plastics, paper and business travel, which we provide to government as part of the Greening Government Commitments. We have been collecting this data for the last few financial years, which has enabled us to identify and promote positive trends in our consumption and waste.

	2024/25	2023/24
Paper consumption (A4 reams equivalent)	573	444
Single use plastic consumption (no. of items)	4,220	4,906
Business travel (km)	1,019,842	603,845

Paper and plastic

Our paper consumption has increased this year against the previous year's level. Staff have been reminded of the need to print only if necessary; the increased paper consumption reflects higher office occupancy.

We have restated our 2023/24 single use plastic consumption count to reflect similar counts used in 2024/25. Our single-use plastic consumption count has significantly decreased. We continue to consider non-plastic alternatives, particularly for our office stationery items.

Business travel

All FRC business travel complies with our travel policy, which requires staff to consider the environmental impact of their travel before making travel arrangements. Travel between our dual locations in London and Birmingham accounts for a percentage of the increase in business travel this year.

11. Ethics and compliance

Data handling

Information and data loss is recognised as one of the FRC's principal risks and, as such, is included on the Principal Risk Register. ExCo and the Board, supported by the Audit & Risk Committee, keep those risks and controls in place to mitigate those risks under review on a regular basis. We keep a separate Record of Processing Activities and an Information Asset Register.

We operate an internal Information Governance Group (IGG) that meets quarterly to review, assess and improve operational oversight and coordination of information governance and controls. The remit of the IGG allows it to support the engagement of staff with, and commitment to, information handling. It identifies areas of concern at an early stage for escalation to ExCo or the Audit & Risk Committee if appropriate.

We understand the importance of privacy and maintaining trust and confidence in our data handling processes. Our Legal Services Team maintains our privacy and data retention policies and procedures, working closely with the Data Protection Officer. Our Legal Services Team also oversees responses to all General Data Protection Regulation (GDPR) and Freedom of Information Act (FOIA) requests, and compliance with application legislation, including UK GDPR. All FRC staff and board members have received mandatory training on relevant aspects of UK GDPR, online security risks and FOIA. Through our processes and procedures, we are able to provide assurance that personal data is handled and processed in line with the seven UK GDPR Principles. Information on our privacy policies can be found on our website.

We ensure we have an up-to-date IT architecture in place to defend the FRC against data security and data loss threats that may occur when staff work in the office or at home. Our IT team takes a layered approach to defending the systems of the organisation, employing several technologies to protect the estate. The team constantly reviews the threat landscape and the cyber security market for new tools and systems. Our procurement team also ensures we follow compliance when contracts are up for renewal. During 2024/25, 27 information incidents were reported. None of these were reportable breaches.

With increasing use of AI across the sector, it has the potential to positively impact the way that we deliver our functions. However, any AI systems we use must be safe, secure and be designed to prevent harm to individuals, organisations, and the market and sectors. Our use of AI is limited to the use of Copilot in Microsoft Edge, available under our Microsoft licence; any and all AI generated content must be checked and validated by the individual using it. Any future potential use of AI must be formally approved by the FRC.

Managing conflicts of interest

All FRC staff and non-executives must comply with the Code of Conduct and make up-to-date, full disclosures regarding their external interests, and any gifts and hospitality received, to ensure that our work remains free from bias. New staff must disclose their relevant interests prior to contract. Staff are not permitted to take part in work relating to an entity they have worked for in the last five years, unless an exemption request has been viewed and approved by a member of ExCo. Staff are also required to have no conflicts of interest when exercising regulatory functions. In accordance with the policy, the People Committee regularly reviews disclosures made by the Board members, ExCo, Senior Advisers and Advisory Panel members. These are published on the FRC website.

Bribery policy

During 2024/25, the FRC recorded no cases of bribery. UK legislation on bribery applies to the FRC, its staff and members of the governance structure. The FRC Code of Conduct, which staff and members of the governance structure must follow, sets out that all colleagues must not bribe another person (including offering, promising or giving a financial or other advantage), accept a bribe (including requesting, agreeing to receive, or accepting a financial or other advantage), or facilitate or condone an act of bribery.

Whistleblowing

The FRC maintains its own whistleblowing mechanisms and internal investigation procedures. The FRC's central complaints function conducts internal reviews into any external complaints received about the FRC itself. An Independent Complaints Reviewer may be appointed to review the FRC's processes should a complainant have any outstanding concerns. During 2024/25, the FRC recorded no whistleblowing reports.

Litigation

During 2024/25, the FRC suffered no monetary losses as a result of legal proceedings associated with the FRC's professional integrity, which would include negligence of duty, malpractice, breach of contract, fraud, corruption or bribery.

Gifts and hospitality

In accordance with policy, the People Committee regularly reviews disclosures made by Board members and ExCo. These are published on the FRC website quarterly.

Modern slavery

The FRC Board annually reviews our Modern Slavery Statement. The FRC does not condone any activity that constitutes modern slavery or human trafficking under the Act. Our suppliers (and supply chain) should maintain the same approach, and we have policies and procedures in place to minimise the risk of modern slavery occurring. Our Modern Slavery Statement is available to view on our website.

Payment practices

The FRC complies with the public sector procurement rules as stipulated in the Public Contracts Regulations

The FRC's supplier relationships seek to deliver successful, sustainable solutions. New and existing suppliers must continuously align their approach, processes and procedures to the core principles relating to minimising risk and compliance with regulations and legislation. In addition, suppliers should strive for good practice relating to information security, financial management and business continuity. It is FRC policy to pay suppliers when or before payments become due, and we endeavour to pay suppliers within 21 days of the date of invoice (achieved in 2024/25: 12 days). As part of the accountability report, we confirm that there are no remote contingent liabilities to report, no loss or special payments made, no gift made over the prescribed limit in Managing Public Money and fees and charges are not material.

Other matters

In accordance with Managing Public Money we are required to provide information on certain matters including losses and special payments, gifts, remote contingent liabilities and fees and charges. Information on fees and charges has been provided in the Financial Review, and we confirm that there are no other matters to report.

Payment practices

The FRC complies with the public sector procurement rules as stipulated in the Public Contracts Regulations

The FRC's supplier relationships seek to deliver successful, sustainable solutions. New and existing suppliers must continuously align their approach, processes and procedures to the core principles relating to minimising risk and compliance with regulations and legislation. In addition, suppliers should strive for good practice relating to information security, financial management and business continuity. It is FRC policy to pay suppliers when or before payments become due, and we endeavour to pay suppliers within 21 days of the date of invoice (achieved in 2024/25: 12 days). As part of the accountability report, we confirm that there are no remote contingent liabilities to report, no loss or special payments made, no gift made over the prescribed limit in Managing Public Money and fees and charges are not material.

Other matters

12. Managing complaints to the FRC

The FRC reviews complaints and referrals received from the public in line with its role in encouraging confidence in the integrity of accountants, actuaries, auditing and corporate reporting. The majority of the complaints we receive that are within our remit concern regulated activities, and a small number of complaints are received about the FRC. Many complaints we receive are outside of our remit. These are passed on to the relevant authorities or bodies that may be able to assist wherever possible.

The FRC has a centralised complaints function to triage complaints and ensure that they are handled, responded to and resolved appropriately, promptly and consistently.

In the course of the year, we undertook continuous improvement reviews of all policies, procedures and processes to ensure they continue to adapt to the changing needs of both the organisation and complainants, and incorporate best practice in complaint handling.

Following receipt, complaints are triaged to determine whether they fall within our remit and, if they do, they are then referred for consideration to one of the below teams.

Corporate Reporting Review

CRR is responsible for reviewing accounts of listed, UK AIM-quoted and large private companies, as well as limited liability partnerships, to determine whether they have complied with relevant accounting and reporting requirements as set out in the Companies Act 2006.

Case Examiner

The Case Examiner is responsible for identifying cases that may fall within the remit of one or more of the FRC's disciplinary or enforcement procedures (the Audit Enforcement Procedure (AEP) in relation to suspected breach by statutory auditors of Relevant Requirements and the Accountancy and Actuarial Schemes in relation to suspected professional misconduct by members of the chartered accountancy and actuarial bodies in public interest cases) for referral to the FRC's Conduct Committee for a decision as to whether to open an investigation by the Enforcement division under the applicable procedure.

Professional Bodies Supervision

Professional Bodies Supervision (PBS) is responsible for providing independent oversight of the professional accountancy and actuarial bodies, considering the way a body has responded to a complaint that was made to it.

Our published policies and complaints forms include clear guidance on how complaints will be dealt with, including timelines.

Complaints in 2024/25

We received 544 complaints during 2024/25, summarised below:

Category	Count
Brought forward (within remit)	12
Incoming complaints	544
Outside remit	460
Closed/resolved complaints (within remit)	78
Carried forward (within remit)	18

The types of complaint received are broken down below:

Type of complaint	Count
Conduct or performance of accountant (regulated)	40
Conduct or performance of accountant (unregulated)	81
Conduct or performance of accountant (unknown)	103
Conduct or performance of auditor	48
Financial reporting	54
Actuarial work	4
Actions of a professional body	127
Insolvency issue	1
Other/unknown	76
FRC	10

The handling timescales across all cases closed in 2024/25 were an average of 1.5 working days to send an acknowledgement and an average of 3.3 working days for the outcome including whistleblowing cases.

Of the 544 complaints received, 84 were referred to the relevant teams within the FRC for further review, with 460 complaints being outside of our remit. The actions taken in respect of the complaints considered by the FRC during 2024/25 are set out below.

Where complainants raise issues outside of the FRC's remit, they are referred to other bodies as appropriate.

Corporate Reporting Review

The CRR team received 30 complaints related to corporate reporting matters during the year, of which 11 related to matters in the accounts, directors' report or strategic report, which we pursued with the relevant company or we are currently analysing.

Complaints received 2024/25

Category	Count
Not pursued
Entity of matter not in scope	16
Insufficient merit	3
Financial statement related
Open	8
Improvements secured – notes or/and narrative	1
Strategic report related
Open	2

The complaints came from a diverse range of parties including private individuals and investors, and relate to companies ranging from private and small AIM to FTSE 100. Consistent with our usual practice, and subject to any relevant confidentiality restrictions, information relating to some complaints was shared with, or referred to, other relevant authorities including the FCA.

At the beginning of the year, there were 11 open cases relating to complaints about corporate reporting matters received in earlier years. The actions taken during 2024/25 in relation to these complaints are illustrated below.

Cases brought forward to 1 April 2024

Category	Count
Not pursued
Insufficient merit	2
In administration or liquidation	2
Entity or matter not in scope	1
Financial statement related
Open	3
No breach	2
Strategic report related
Open	1

Case Examiner

The Case Examiner opened three complaint cases this year. Seven complaints were also received in relation to matters to which the case assessment team had existing cases open. One complaint was received regarding a matter that had previously been considered by the team.

One complaint case was closed by the team this year. This case, in relation to audit, was referred to the Conduct Committee which decided to open an investigation.

Professional Bodies Supervision

PBS is responsible for providing independent oversight of the professional audit, accountancy and actuarial bodies, considering the way a body has responded to a complaint that was made to it.

PBS received 44 complaints about the professional audit, accountancy and actuarial bodies that we supervise. One complaint was brought forward from the previous year. Of those 45 total complaints, the team conducted a full review of the professional bodies' relevant process in 15 of these cases. Two complaints remain open as of 31 March 2025.

The remaining 28 matters either fell outside the team's complaints handling review remit, or the complainant had not exhausted the professional body's complaints procedure. PBS responded to 88% of complaints within six weeks.

Whistleblowing to the FRC as a prescribed person

Public interest disclosures

Whistleblowing is the term used when an employee passes on information concerning suspected or known wrongdoing by their employer (also known as 'making a disclosure'). The Employment Rights Act 1996, as amended by the Public Interest Disclosure Act 1998, provides the legal framework for protecting workers from harm if they blow the whistle. The purpose of a prescribed person is to provide employees with a way of whistleblowing to an independent body that may be able to act on those concerns.

The FRC is a prescribed person under UK whistleblowing legislation. Therefore, individuals working outside the FRC, in the accounting, auditing or actuarial professions, may contact the FRC if they want to make a disclosure about their current or former employer in relation to matters that are within the scope of the FRC's regulatory remit.

During 2024/25, the FRC received 73 disclosures in its capacity as a prescribed person. As a result, we took the following action:

67 related to issues not within the remit of the FRC, so whistleblowers were signposted to the relevant bodies where appropriate.
6 were of direct relevance to the FRC's responsibilities and were addressed by the relevant teams.

As with our complaints processes, our whistleblowing procedure is regularly reviewed to ensure cases are dealt with appropriately and responded to promptly. Our published policies include clear guidance on the types of concerns that can be raised and how cases will be handled.

Complaints about the FRC

During 2024/25, ten new complaints were received about the FRC. No significant issues of wider concern were raised, and the cases were handled under the FRC Complaints Procedure. Two of the concerns raised were regarding dissatisfaction with the FRC's review of the handling of their complaint by the relevant professional body. Internal reviews determined that the complaints were handled in line with our policies and procedures. None of the complainants exercised their right to have their complaint escalated to the Independent Complaints Reviewer.

The remaining eight complaints were related to varying issues which were reviewed and responded to under the complaints process. Again, no issues of wider concern were raised.

13. Financial review

As a public body subject to the government's requirements for Managing Public Money, we seek to operate efficiently and effectively. We consult stakeholders annually on our budget and funding requirement. In line with the majority of UK public bodies, the FRC now reports under IFRS rather than UK GAAP as previously. The notes to the accounts make clear the resulting changes to the presentation of our financial statements.

As a result of cost savings and higher than forecast receipts from our levies, as set out below, the FRC ended the 2024/25 with an overall surplus of £2.0m. In March 2024, the FRC Group, comprising the FRC and the UK Endorsement Board, set an overall budget for 2024/25 of £71.5m. Of this, £66.5m was for operating costs and £5.0m for the estimated costs of enforcement cases. The budget was set at the level necessary to support our existing regulatory activities while keeping a flat headcount. Of the £66.5m budget for operating costs, £1.7m was to cover the costs of our work on local audit, which from 13 February 2025 has been undertaken directly by Government.

Our actual overall expenditure in 2024/25 was £67.8m. Actual core operating expenditure for the FRC Group during 2024/25 was £63.5m (£3.0m under budget). Our annual budget for audit and accountancy enforcement case costs is based on the estimated costs of cases net of amounts recovered through cost awards. Net case costs in 2024/25 were £4.3m (£0.7m below our estimate of £5.0m).

Core cost 2024/25 actual (£m)

Category	Amount
Supervision*	40.8
Regulatory Standards	7.9
Enforcement core	6.0
UKEB	5.2
Audit and accountancy case costs	4.3
Actuarial standards and regulation	3.6
Total	67.8

Core cost 2023/24 actual (£m)

Category	Amount
Supervision	33.4
Regulatory Standards	13.6
Enforcement core	4.7
UKEB	4.6
Actuarial standards and regulation	3.3
Audit and accountancy case costs	0.0
Total	59.6

*Year-on-year comparison of the costs are not comparable because of reorganisation of relevant divisions.

Managing our expenditure

The major component of the budget for FRC Group's operating expenditure of £66.5m was for staff costs, £51.9m. We applied an overall increase to remuneration in line with public sector pay guidance with approval from DBT. This was offset by rephasing recruitment during the year, because we had not taken on the additional statutory responsibilities costed in original budget. Overall, actual staff costs were £51.4m, £0.5m below budget.

We have continued to focus on securing best value from our expenditure. We saw higher than expected costs (£0.2m) at our London Wall office due to a rent review. We secured savings on other areas of £3.2m, including IT and website costs (£1.2m), legal and professional fees (£0.8m), and conferences and travel (£0.3m).

Managing our funding

We operate our annual funding arrangements as agreed with government. We liaise with DBT regularly during the course of the year on progress in collecting the levies.

For 2024/25 we set an annual funding requirement of £71.5m; and charged an actual requirement of £69.9m.

The audit and accountancy professional bodies fund our work on audit and accountancy regulation, including the costs of enforcement cases. An annual funding requirement is set at the beginning of the year. We adjust the amount we collect from the professional bodies in line with actual expenditure. For 2024/25 we set a requirement of £38.7m and collected £37.1m. (Recognised Supervisory Bodies (RSBs), Consultative Committee of Accountancy Bodies (CCAB), Chartered Institute of Management Accountants (CIMA)).

We operate an annual levy on accounts preparers to fund our work on corporate governance, investor stewardship, and corporate reporting regulation, the cost of the UKEB and 50% of the core costs of our enforcement function. For 2024/25, we set a levy of £24.3m, with an additional government contribution of £0.6m towards the cost of the Codex project. We allocated £1.0m from our general reserves to mitigate the increase in levy rates that we would otherwise have applied. These reserves were largely funded by contributions from accounts preparers. Receipts from the preparers levy in 2024/25 were £0.8m more than the requirement that was originally set, reflecting additional payments from previous years.

Our work on actuarial regulation is funded by the Institute and Faculty of Actuaries (IFoA), insurers and pension schemes. For 2024/25, we set an annual funding requirement of £3.6m, which was collected through the established arrangements with the IFoA and the insurance and pension levies.

FRC funding sources

The following diagram shows the proportion of our overall funding contributed by each major funding group:

The diagram illustrates the FRC's funding by group for 2024/25 and 2023/24, shown as two pie charts.

Funding by group 2024/25 total £69.9m

Category	Percentage	Amount
Accountancy bodies and audit firms	47%	£32.8m
Preparers	36%	£25.1m
Actuarial funding groups	5%	£3.6m
Other	6%	£4.1m
Case costs*	6%	£4.3m

2023/24 total £58.4m

Category	Percentage	Amount
Accountancy bodies and audit firms	52%	£30.0m
Preparers	36%	£21.2m
Actuarial funding groups	6%	£3.5m
Other	6%	£3.7m
Case costs	0%	£0.04m

Other income includes income from publications and electronic rights, and registration fees from third-country auditors.

Reserves

At March 2025, the FRC held £16.8m in reserves, which were established following consultation to cover both CRR and actuarial case costs and unforeseen costs relating to the FRC's regulatory activities. These monies are held in FRC bank accounts and can be deployed with DBT consent.

Government functional standards

We pay particular attention to ensuring that we meet the mandatory Government Functional Standards for Finance and Counter Fraud. We implement robust budgeting and financial planning processes. This ensures the necessary discipline and transparency in our financial operations. For counter-fraud we have established comprehensive mechanisms for detection and prevention. These include controls in our financial systems that have been end-to-end tested, which we will keep under close review to align with changes to legal requirements and meet the rigorous standards required by government for partner bodies. We also meet the applicable mandatory standards in other key areas, including HR and IT.

*Revenue from enforcement cases is net of cost awards received, and is not comparable year on year.

14. Risk management

Our risk management framework is aligned with HM Treasury's Orange Book, the UK Corporate Governance Code and good practice principles, ensuring effective strategy delivery in the public interest. We manage risks according to the Board's risk appetite statement, integrating risk-based decision-making into our 3-Year Strategy and Annual Plan & Budget to harness opportunities while avoiding excessive risk.

The Board reviews the effectiveness of the risk and internal controls framework. It sets risk levels for delegation to ExCo through policies and delegated authority. The Audit & Risk Committee provides assurance on the effectiveness of the risk management and internal control system and reports to the Board, while ExCo ensures that values, behaviours and policies are communicated and embedded to support our risk culture.

Maintaining an effective risk framework

The FRC's risk management and governance structure strengthens our ability to identify, assess and report risks through the 'three lines' model. This ensures effective management and oversight of our risk culture, emerging and key risks, controls and information cascading to support better decision making.

The Board validated our risk framework and internal control system's effectiveness and activities through a detailed review. This included executive directors' updates, assurance mapping via principal risks, risk reporting and audit findings throughout the year. ExCo and the Audit & Risk Committee conducted deep dives into key risks, the corporate risk register and internal controls, ensuring appropriate mitigations, identifying emerging risks and aligning with our risk appetite.

We implemented risk management software to support the oversight of risks across the FRC and improve reporting. We held a risk awareness week, gathering insights from staff, non-executive directors and industry experts, promoting the importance of a strong risk culture. We completed our three-year risk improvement plan, achieving our risk maturity target. We will continue to review our risk management and internal control approach in the coming year.

This diagram illustrates the "Three Lines" model for corporate governance and risk management within the FRC, showing interconnected roles and responsibilities.

The diagram consists of three concentric circles. The innermost circle contains "ExCo" and "Audit & Risk Committee", representing the second line. The middle circle contains "Board", representing the top-level oversight. The outermost circle and arrows indicate the "First line", "Second line", and "Third line" of defence. Arrows indicate flow and interaction.

Text descriptions associated with the model:

First line

Corporate Risk Team

Timely identification, assessment and management of existing and emerging risks to achieve strategic objectives.
Implement corrective actions.

Second line

Audit & Risk Committee

Supports and advises the Accounting Officer and the Board in oversight of risk management and internal control systems.
Reviews effectiveness of risk management and controls.

ExCo

Sets the tone from the top.
Establishes a positive risk culture.
Conducts deep dives into principal risks.
Cascades risk and controls information.

Third line

Government Internal Audit Agency

Provides independent and objective assurance and advice on the effectiveness of the framework of governance, risk management and controls.

Board

Determines our overall risk strategy, management and culture.
Determines the nature and extent of the significant risks to be taken to achieve our strategic objectives (risk appetite).

Our principal risk profile

We reviewed our six principal risks and closed the local audit leadership risk, as system leadership has been transferred to the Ministry of Housing, Committees and Local Government.

Our principal risks are set out below, mapped against the FRC's strategic objectives:

Key	Description
Strategic objective	Objective 1 - The standards and expectations we set will enhance corporate governance, corporate reporting and investor stewardship in a manner that supports UK economic growth and investment.
	Objective 2 – Our proportionate regulation of accounting, audit, assurance and actuarial work will expect and encourage high quality by those responsible, acting as an improvement regulator and dealing effectively and fairly with cases where there are significant or serious shortcomings.
	Objective 3 - We will build on our deep understanding of corporate reporting and the audit and actuarial markets we oversee, and by being agile, we will identify and prepare for opportunities and challenges on the horizon.
	Objective 4 - We will be a modern organisation – continuously learning, improving and considered by others as a respected, effective and highly engaged regulator and by our colleagues as an inclusive and great place to work.
Risk severity	High (H) – A high likelihood of substantially affecting the strategic objectives should it occur.
	Medium (M) – A moderate threat, but not a critical impact to the strategic objectives.
	Low (L) – Unlikely to have a significant impact on the strategic objectives.
Risk trend	Increase (represented by an upward arrow icon)
	No change (represented by a horizontal bar icon)
	Decrease (represented by a downward arrow icon)

Risk description

Information

Due to cyber-attacks or an insufficiently mature approach to data and information management, we fail to maintain our data or exploit opportunities for better regulatory outcomes. This results in loss of sensitive data, breach of law/regulation, fines and reduced regulatory effectiveness.

Risk severity: High (H icon indicating high severity).

Key activities and headlines

The risk remains stable. Key activities included cyber essentials and disaster recovery testing to protect information security, understanding strengths and weaknesses to defend against cyber threats and strengthening incident response plans. Monitoring, reporting and patching programmes were implemented to eliminate, reduce, or offset undesirable action on our IT environment. Implementing SharePoint improved data centralisation, efficiency and collaboration, which is supported by information governance and GDPR privacy policies. GDPR compliance is maintained and monitored regularly, with no major issues identified by Data Protection Officer reporting.

We adopted National Cyber Security Centre guidelines and collaborated with the UK Regulators Network and other arm's length bodies to improve cybersecurity practices and culture.

Cyber threats are evolving, so we will therefore continue investing in monitoring tools, technology projects and employee training to support our security culture and enhance our operational efficiency.

Risk trend: No change (horizontal bar icon).

Reputation

Due to a high-change environment or a lack of proportionate consideration of stakeholder impacts, the FRC fails to manage evolving political and stakeholder expectations. This results in a loss of trust in corporate governance, standard setting, corporate reporting, and audit quality, and/or undermines our ability to contribute towards our growth duty.

Risk severity: Medium (M icon indicating medium severity).

Key activities and headlines

Against a backdrop of significant external changes, the risk has improved over the year. Key mitigation initiatives included embedding a strategic narrative to align stakeholder expectations with FRC priorities. We deepened collaboration with stakeholders across politics, business, media, and international regulatory bodies to inform our work, address concerns, and support our narrative while minimising business burdens. We maintained a live assessment of the political environment, engaged with the Secretary of State's roundtables and DBT, and assisted with media handling, including private equity investment in audit and the open letter to the market.

As we move forward, we recognise the potential risks associated with our work and the broader external environment. To address these, we will continue to enhance our horizon scanning capabilities, enabling us to swiftly identify and respond to emerging issues.

Risk trend: Decrease (downward arrow icon).

Policy

Due to insufficient investment, focus or introducing unjustified divergence, the FRC fails to effectively influence and implement domestic and international accounting, audit and actuarial standards and expectations. This results in unnecessary cost to stakeholders in the ecosystem and risks undermining the quality of information supporting decision making in financial markets.

Risk severity: Medium (M icon indicating medium severity).

Key activities and headlines

Over the course of the year, the risk has remained stable. International standards are risk-based and effective to meet UK stakeholders' needs. Guided by risk assessment, technical evaluation and engagement, local and international bodies, and representation on boards and committees, Codes, standards, and guidance are regularly reviewed. Horizon scanning and prioritising emerging needs maintain trust in decision-making information, supporting economic growth and the stability of UK financial markets. Looking ahead, our focus will be to ensure that the 2024 Corporate Governance Code and 2026 Stewardship Code are embedded and well understood by relevant stakeholders.

Risk trend: No change (horizontal bar icon).

Audit supervisory model

Our audit supervisory model is not sufficiently effective, risk-based, or proportionate, creating a failure to drive audit quality improvements or build firm capability and market resilience, resulting in a lack of confidence in audit and a less sustainable and healthy audit market.

Risk severity: Medium (M icon indicating medium severity).

Key activities and headlines

The risk has remained stable. Audit quality results derived through direct supervision of the firms and via the professional bodies continue to show improvement at the major firms (at the six largest firms and, to a lesser degree, at the next six). Our current focus is on regulation of firms' system of quality management and ensuring we are proportionate based on the audit quality and risk of audit firms.

The development of the Future Audit Supervision Strategy project and SME market study alongside current initiatives such as the Scalebox and Supervision of Professional Bodies Strategy will continue to ensure the FRC has an effective, risk based and proportionate supervisory model to support a sustainable audit market.

Risk trend: No change (horizontal bar icon).

Operations

As a result of poor or inconsistent internal management, leadership or structures, the FRC fails to adapt to change, and deliver on its strategic objectives.

Risk severity: Medium (M icon indicating medium severity).

Key activities and headlines

The risk has improved during the year. Key mitigation activities have included ensuring ExCo and senior leaders have clear leadership objectives, including values and behaviours to enable a coherent and consistent tone from the top. Quarterly ExCo and SLT meetings are held to engage leaders in discussion around organisational development and to encourage efficient and effective governance. Additionally, ExCo periodically discusses SLT succession planning and talent management to drive consistency in core people management.

In the next year, we will work to embed our new performance management review process across the organisation. We also plan to procure a new HR Information System that will enable us to support colleagues in a more comprehensive way.

Risk trend: Decrease (downward arrow icon).

Governance

Big Ben clock tower and the Houses of Parliament in London under a clear blue sky, with people and red buses visible on a bridge in the foreground.

15. Chair's introduction

I am pleased to present this year's governance section of our annual report, which sets out how the Board and its committees operated during 2024/25.

We have seen a number of important changes over the course of the last year to enhance the governance of the FRC including dissolving our Supervision Committee and Regulatory Standards & Codes Committee, streamlining our governance processes and helping to pave the way for more strategic conversations and holistic thinking at the Board and ExCo. Our new governance structure became effective on 1 June 2024, and since then our Board and Executive Committee has refocused its work in a more efficient and agile structure to support the delivery of our regulatory remit.

We have also begun work on an ambitious programme to review our audit supervision strategy and our enforcement processes. The Future of Audit Supervision Strategy project is undertaking a comprehensive review of our current approach to make it more effective, proportionate, and fit for the future. The End-to-end Enforcement Process review looks at the processes and procedures for our enforcement regime, from initial case assessment to the publication of outcomes, taking into consideration governance structures, decision-making and operational efficiency and effectiveness. We have been discussing this work with stakeholders and will continue to do so throughout the process. This work will position us strongly for the future, ensuring our processes continue to be efficient, effective, and proportionate, and encourage improvement and high-quality standards. We have fully embraced the government's ambition for economic growth and renewed our commitment to supporting the right business environment in our letter to the Secretary of State for Business and Trade in November

It remains essential that we continue promoting high standards of corporate governance, corporate reporting and audit to contribute to the UK's well-earned reputation as an attractive destination for investment.

In November 2024, we announced the further strengthening of our Board with the appointment of Charlie Parker, Eva Lindholm and Simon O'Regan as non-executive directors (NEDs), in addition to the existing five directors. These appointments followed an extensive recruitment process seeking candidates with deep actuarial, investment management and public sector experience. The calibre of these appointments reflects our commitment to driving excellence in the way the FRC is governed and underpinning the way we regulate with industry knowledge and experience.

Finally, I would like to express my thanks to all of my colleagues at the FRC for their commitment, professionalism and focus on successfully delivering on our priorities in the last year.

A handwritten signature in black ink.

Sir Jan du Plessis Chair

16. Governance and transparency framework

The FRC is an arm's length body of the government and a private company limited by guarantee. It reports to the Secretary of State for Business and Trade and to Parliament on the discharge of its functions. The Secretary of State for Business and Trade appoints the Chair and NEDs to the FRC Board, which is responsible for the FRC's strategy and monitoring its implementation.

Our governance structure is designed to provide the Board with the assurance and confidence that any proposals considered by them take account of the impact on our stakeholder community.

Diagram: FRC Governance Structure

The diagram illustrates the hierarchical governance structure of the FRC.

At the top, overseeing everything, is Parliamentary Accountability (including the Business and Trade Committee).

Below this sits the FRC Board (including the CEO, who also serves as the Accounting Officer).

Connected to the FRC Board, on the left, are Senior Advisers.

Directly reporting to the FRC Board, there are three committees:

People Committee: Role includes remuneration, succession planning, and talent management.
Audit & Risk Committee: Role involves oversight of financial reporting, internal audit, and risk control functions.
Conduct Committee: Role encompasses investigations and enforcement functions.

Parallel to the Conduct Committee, on the right and described as "arm's length", are:

Enforcement Committee Panel (arm's length)
Tribunal Panel (arm's length)

Below all these committees, and reporting to the FRC Board, is the Executive Committee. Its role is to manage day-to-day operations, including resources, policies, and programmes.

Corporate governance statement

As a private limited company, the UK Corporate Governance Code does not apply to the FRC. However, as the regulator of the Code, the FRC upholds high standards of transparency, accountability and integrity, and aligns itself with the principles and provisions of the Code where they are relevant and applicable. As an arm's length body, the FRC also follows the Corporate Governance in Central Government Departments: Code of Good Practice and the Regulators' Code. Areas of departure from these Codes are explained below.

Corporate Governance Code

Engagement with shareholders and stakeholders (Provisions 3 and 4)

As the FRC is a private company by guarantee, it has no shareholders, but we regularly engage with our stakeholders through a variety of communications and engagement. Further information can be found on page 25 in relation to our Section 172 statement.

Appointments to the board (Provisions 17 and 18)

Since the appointments to the Board are a matter for the Secretary of State, the procedure is not directly under the FRC's control. However, the Chair of the Board develops the candidate brief to support the recruitment campaign and sits on the public appointments recruitment panel to ensure that the skills and experience required on the Board are taken into consideration.

The People Committee also annually considers the balance of competencies to ensure alignment to the FRC’s purpose and strategic priorities; the environment in which it operates; the characteristics, perspectives, independence, and diversity of board members; and other factors relevant to its effectiveness. This review informs any recommendations to the Secretary of State in respect of reappointments and the appointments exercise.

The FRC does not have shareholders, therefore members of the board are not subject to annual shareholder re-election. The terms of appointment are set by the Secretary of State in accordance with the Public Appointments Process.

Audit, risk and internal control (Provision 31)

As an arm’s length body under the sponsorship of DBT, the FRC is not required to produce a viability statement assessing the FRC’s prospects over the longer-term. However, the FRC receives a Letter of Comfort from DBT which provides an assurance of financial support.

Furthermore, the financial statements confirm that it is appropriate to adopt the going concern basis of accounting and the Plan and Budget approved by the Board supports this view.

Remuneration (Provisions 32, 33, 36-38)

The FRC does not have a Remuneration Committee or shareholders. The People Committee has responsibility to consider submissions in respect of staff pay awards and to advise the Secretary of State on the proposed fees for NEDs.

As a Non-Departmental Public Body, the FRC follows public sector pay guidelines with oversight from DBT, HM Treasury and the Cabinet Office in relation to remuneration decisions across the organisation. Therefore, malus and clawback provisions are not relevant.

17. Our Board and Committees

The Board is responsible for the strategic direction and supervision of the FRC, regularly reviewing operational plans and financial performance. It is also responsible for managing, assessing and mitigating risk. The Board is comprised of the Chair, Chief Executive and eight NEDs. The Board has delegated functions under the enforcement and disciplinary procedures to the Conduct Committee. It met eight times in 2024/25.

The roles of the Chair and the Chief Executive are held separately, ensuring a clear separation of responsibilities in line with the UK Corporate Governance Code. The Chair leads the Board and ensures its effectiveness through the management of board meetings, agenda setting and supporting the optimisation of board discussions. The Chair also takes a leading role in board succession planning and ensuring effective communication with stakeholders.

As the Accounting Officer, the Chief Executive is personally responsible for safeguarding the public funds under their control, ensuring propriety and value for money in the handling of those public funds, and the day-to-day operation and management of the FRC. The Chief Executive has a responsibility to the Permanent Secretary for Business and Trade as the Principal Accounting Officer for all public bodies in the DBT family, who delegates powers directly to the Chief Executive through a Framework Agreement.

In the financial year 2024/25, the Board discharged its responsibilities through Reserved Powers and through its Board Committees as outlined in the Governance Handbook. This was also updated to reflect the new governance structure from 1 June 2024.

The Committees are composed of NEDs and are assisted by Senior Advisers who are subject matter experts and act as a sounding board for ongoing issues and topics. Representatives from the National Audit Office (NAO) and the Government Internal Audit Agency (GIAA) attend meetings of the Audit & Risk Committee. The biographies of all members of the governance structure, the Reserved Powers of the Board and the Terms of Reference for each committee, together with a summary of board business, are published on the FRC website.

Board members (as of 31 March 2025)

Key to Committees

AR Audit and Risk
P People
C Conduct

Bold and black keyline denotes Chair of the Committee

Full biographical details of each director are available at www.frc.org.uk

Sir Jan du Plessis

Headshot of an older man with glasses, wearing a suit and yellow tie, smiling slightly, against a white background.

Role: Chair
Committees: P (People - Chair), C (Conduct)
Appointed: 3 February 2022
Attendance: 8/8
Experience: Sir Jan had a career in business, serving a period of over 18 years as Chair of various public companies including BT Group plc, Rio Tinto plc, SABMiller plc, RHM plc and British American Tobacco plc. These roles have given him extensive experience in leadership and governance of some major public companies. He has also had multiple interactions with the institutional investment community and gained meaningful insight into the challenges facing the audit services sector.
Sir Jan has also served as a NED of Marks and Spencer Group plc and Lloyds Banking Group plc. From 1988 to 2004 he was CFO of Richemont.
Sir Jan was knighted in the 2022 New Year’s Honours List for services to telecommunications and business.
External appointments: Sir Jan is Mentor and Adviser of Chair Mentors International.

Richard Moriarty

Headshot of a bald man with glasses wearing a blue jacket, likely an executive or board member.

Role: Chief Executive Officer and Accounting Officer
Appointed: 2 October 2023
Attendance: 8/8
Experience: Richard has over 25 years of board-level experience across a range of regulated sectors. Prior to joining the FRC, he was CEO of the UK’s Civil Aviation Authority and before that the CEO of the Legal Services Board, which oversees the regulation of the legal professions. Earlier in his career he held senior roles in the regulation of social housing, communications and energy. He has also held roles in the private sector such as director of a water company and partner for a consultancy.
External appointments: In a non-executive capacity, he was Deputy Chair of the Social Housing Regulator, responsible for the governance and financial viability of social landlords. Outside of the FRC, Richard is Chair of a housing association.

Clare Thompson

Headshot of a smiling woman with short blonde hair, wearing a teal jacket and pearl earring.

Role: Senior Independent Non-Executive Director
Committees: AR (Audit and Risk - Chair), P (People)
Appointed: 1 February 2022
Attendance: 8/8
Experience: Clare retired from PwC in 2011 having been a partner for 23 years. At PwC she was audit/lead partner on major financial services groups and served as UK Insurance leader and a member of the UK Assurance executive team.
Since leaving PwC she has built a portfolio of non-executive roles and has served as Senior Independent Director and Chair of the Audit Committee at Bupa, Chair of the Audit Committee of Bupa’s UK insurance business, a Non-Executive Director of Direct Line Insurance Group plc, a Non-Executive Director of Retail Charity Bonds plc, as Chair of the Audit Committee of Miller Insurance Services LLP and as Treasurer of the Disasters Emergency Committee.
Clare is a member of the Institute of Chartered Accountants in England and Wales (ICAEW).
External Appointments: Clare is a Senior Independent Director and Chair of the Audit Committee at M&G plc.

Angela Cha

Headshot of an Asian woman with dark hair, wearing a dark top.

Role: Independent Non-Executive Director
Committees: P (People - Chair), C (Conduct), AR (Audit and Risk)
Appointed: 1 February 2022
Attendance: 8/8
Experience: During her executive career, Angela was a solicitor and partner at Pinsent Masons where she was Joint Head of the Financial Services Sector Practice and specialised in advising financial services sector clients on business change and transformation projects.
External appointments: Angela is a NED on the Board of the Saffron Building Society.

Eva Lindholm

Headshot of a smiling woman with blonde hair, wearing a black top and gold earrings.

Role: Independent Non-Executive Director
Committees: P (People - Chair)
Appointed: 28 November 2024
Attendance: 3/3
Experience: Eva has had a broad executive career in the financial services industry, having worked at J.P. Morgan for 27 years and UBS for 12 years. She has significant leadership experience in investment banking, corporate banking and wealth management, across several geographies and markets. She has served on the Board of Transport for London, including on its Finance and Policy Committee, and on the UK Government’s Investment Council. Eva has also served as the Chair of the UBS Optimus Foundation UK.
External appointments: Eva is Chair of the Arosa Foundation, which is focused on supporting female founders. She is also Non-Executive Director at CapMan, a Nasdaq Helsinki-listed and headquartered private equity investor, and SEB (the former Skandinaviska Enskilda Banken), a Nasdaq Stockholm-listed and headquartered wholesale bank.

Hannah Nixon

Headshot of a woman with short blonde hair, wearing a blue jacket.

Role: Independent Non-Executive Director
Committees: P (People - Chair), AR (Audit and Risk)
Appointed: 24 June 2021
Attendance: 8/8
Experience: Hannah has widespread experience in economic regulation across a range of industries. She brings significant experience of developing, implementing and enforcing regulatory regimes and influencing public policy. She was the first CEO of the Payment Systems Regulator, the economic regulator of the UK’s £80tn payments industry, responsible for driving competition and innovation in the interests of consumers. She was also a senior partner at Ofgem, where she had responsibility for the networks division.
External appointments: Hannah is currently Chair of the Single Source Regulations Office, the UK regulator for non-competitive defence procurement, Chair of the Retail Energy Codes Company, and is also a NED of the National Energy System Operator and Worldpay UK.

Charlie Parker

Headshot of a smiling bald man wearing a dark suit and light blue shirt.

Role: Independent Non-Executive Director
Committees: P (People - Chair)
Appointed: 28 November 2024
Attendance: 3/3
Experience: Charlie was previously Chief Executive and Head of the Public Service for the Government of Jersey. Prior to this, he was Chief Executive of Westminster City Council and Chief Executive of Oldham Metropolitan Borough Council. During his various roles as a Chief Executive, Charlie oversaw the significant transformation and modernisation of a large number of public services often resulting in reduced costs and improved performance.
External appointments: Charlie is a NED of NewRiver REIT plc and a member of the Challenge Board overseeing the Buckingham Palace Reservicing Project. Charlie is also a Director and Trustee at Griffin Investors Ltd.

Simon O'Regan

Headshot of a smiling older man with grey hair and glasses, wearing a dark suit.

Role: Independent Non-Executive Director
Committees: P (People - Chair)
Appointed: 28 November 2024
Attendance: 3/3
Experience: Simon has over 40 years’ experience in the insurance, pensions and asset management industries. He is a UK Chartered Actuary and has lived and worked in six countries around the world including as CEO of Mercer in Australia, in the UK, in Europe and in the USA/Canada. Simon was formerly a NED of Alexander Forbes Group Holdings Ltd. Simon was a member of the UK’s Nuclear Liabilities Financing Assurance Board and also served as a non-executive member of the Foreign, Commonwealth and Development Office’s Audit and Risk Assurance Committee.
External appointments: Simon is the Chair of Impax Asset Management Group plc.

Ruwan Weerasekera

Headshot of a smiling man with a beard and blue-rimmed glasses, wearing a light blue shirt.

Role: Independent Non-Executive Director
Committees: AR (Audit and Risk - Chair), P (People)
Appointed: 21 June 2021
Attendance: 8/8
Experience: Ruwan is the former Chief Operating Officer and a Managing Partner of SoftBank Investment Advisers, a Managing Director and Chief Operating Officer for Securities at UBS Investment Bank and a Partner of Accenture. He is also a former Senior Independent Director of ICBC Standard Bank plc and a NED of London North West University Health Care Trust.
External appointments: Ruwan is a NED at BlackRock Group Limited. He is also a Non-Executive Board Director of UK Research and Innovation (UKRI), a non-departmental public body sponsored by the Department for Science, Innovation and Technology which brings together the seven disciplinary research councils, Research England and the UK’s innovation agency, Innovate UK. Ruwan also chairs the Audit, Risk and Assurance Committee of UKRI.

David Willis

Headshot of a smiling older man with grey hair and glasses, wearing a dark suit.

Role: Independent Non-Executive Director
Committees: C (Conduct - Chair), P (People)
Appointed: 1 February 2022
Attendance: 8/8
Experience: David is a solicitor by profession and was a partner in international law firm Herbert Smith Freehills (and predecessor firm Herbert Smith) for many years. He was Managing Partner of Herbert Smith from 2008 to 2012 and Joint CEO of Herbert Smith Freehills from 2012 to 2014.
He was previously a member of the governing body of Queen Mary University of London, where he chaired the Audit and Risk Committee, a member of the board of the Solicitors Regulation Authority, where he chaired the Finance and Audit Committee, and a member of the Law Society Group Audit Committee. He was Vice Chair of United Response, a charity supporting adults with learning disabilities, where he chaired the Finance and Resources Committee.
External appointments: He is currently Chair of Paradigm Trust, a multi-academy trust.

Company Secretary

The Board and its committees have access to an appropriately qualified and experienced Company Secretary who provides independent advice on governance matters. They are responsible for working with the Chair, Chief Executive and ExCo to develop the agendas for board and committee meetings and ensuring that all governance procedures are complied with. The removal and appointment of the Company Secretary is a matter reserved for the Board.

Transparency

The FRC reports to the Secretary of State for Business and Trade and Parliament on the discharge of its statutory functions and lays its Annual Report and Accounts before Parliament.

Board appointments, diversity and succession planning

Appointments to the Board are made by the Secretary of State for Business and Trade in accordance with the Public Appointments Process. The Chief Executive is a permanent employee, and members of the Board are subject to three-year appointments, except the Chair, who is appointed for a four-year term.

The Board Diversity Policy sets out the Board’s support for the government’s ambitions with respect to diversity, and the Board’s commitment to work with the Secretary of State in pursuit of the government’s diversity objectives. The Board gender split is 60% male and 40% female and is compliant with the Parker Review.

The Board annually reviews the board skills matrix and succession plans and in the year. Three new NEDs were recruited through the public appointments process to ensure that the Board has relevant skills and expertise to support the strategy.

Board induction and training

This year, a detailed and tailored induction programme was initiated for the three new NEDs. The programme included meetings with senior executives from across the FRC to gain a full understanding of the roles and responsibilities of senior management, standard setting, supervision and enforcement procedures and policies, and overall operations. All Board members continued to receive bespoke training on various matters throughout the year.

Independence and conflicts

The FRC attaches special importance to avoiding any potential conflict between the work and values of the FRC and the personal interests of its staff, NEDs and advisers. Please see more on our ethics and compliance on page 29.

Key Board matters 2024/25

Board meeting agendas are curated in advance by the Chair, Chief Executive and the Executive team to ensure an appropriate balance between strategic and operational matters. The Board agenda includes a report from the Chief Executive on key operational matters, and the Board regularly receives key information on the delivery of the strategy, finances, risks, HR matters and the internal control environment.

The Board assesses, constructively challenges and considers the Executive’s proposals and matters for decision to ensure they are aligned with the FRC’s strategy and purpose. The focus of the Board’s business throughout the year can be assessed through the lens of the seven broad themes outlined below. The Board and Executive are assisted by senior advisers who are subject matter experts.

The senior advisers provide advice, feedback and mentoring and act as sounding boards for ongoing issues and topics.