FRC for you FRC Citizens’ Juries

FRC Citizens’ Juries

Understanding citizens’ views on the regulation of corporate reporting, corporate governance and audit

 

Deliberative research conducted on behalf of the Financial Reporting Council (FRC) by BritainThinks.

 

As an organisation that works in the public interest, we are keen to better understand how the public think we can be the most effective. Almost everyone has an interest in the FRC being an effective regulator, whether as an employee, a direct investor, a pension fund member or interest-bearing account holder.

However, because most of our work is not directly public facing there is a low level of understanding and awareness of what the FRC does. So, we decided to take a “deliberative” (discussion-based) approach to get a better understanding of the views of the public. Holding citizens’ juries allowed participants to be presented with, and have time to discuss and interrogate, information about:
  • corporate reporting
  • corporate governance and
  • audit
and the FRC’s work in these areas, before discussing their views and developing recommendations.
The final report findings from the three citizens’ juries – in London, Edinburgh and Coventry – and a reconvened workshop with participants from all three locations, are presented here.   
As well as the final report, including an Executive Summary, there are two video clips to view which summarise the findings with direct input from participants: the first covering the whole report and all three topics; the second focusing on audit.

How we are using the research

The research findings provide many useful ideas and context for the work we do, both in general - including informing FRC board discussion and decision-making – and feeding into specific, current projects. For example, the citizens’ views on corporate reporting and, in particular, that they found annual reports inaccessible and lengthy, is being considered by those working on the FRC’s ongoing project on the Future of Corporate Reporting.

On stewardship of companies, jurors voiced concerns about stewardship falling exclusively to shareholders  - expressing doubts about whether shareholders were in the best position to influence companies or to represent the wider public interest – thoughts which will feed in to the next revision to the Stewardship Code. On corporate governance the citizens felt that ensuring diversity on boards was critical in enabling companies to act in the public interest, something which the 2018 Corporate Governance Code asks to be considered in the annual board evaluation.

On audit, the citizens thought that auditors should look at a wider range of matters, including the company’s impact on the environment and society, and look at financial viability over a longer time period. The citizens’ views on audit have been fed into the Independent review into the quality and effectiveness of audit by Sir Donald Brydon, commissioned by the Secretary of State for Business.

Overall, the citizens thought the FRC should have more power and “teeth” to hold companies to account but any increase in regulation should not ‘stifle’ companies’ ability to operate and flourish. The citizens’ overarching vision for the FRC, and what effective regulation looks like, is helping to shape the implementation of the Independent review of the Financial Reporting Council, by Sir John Kingman, again as commissioned by the Secretary of State for Business.

The research is therefore very timely and helps to plug an important gap in the evidence base about public opinion on the FRC’s work, both now and for the future development and transition of the FRC into the Audit, Reporting and Governance Authority. 

   

Click here for the final report (PDF)


A big thank you

We would like to thank all the participants very much indeed for their insights and views, and BritainThinks for facilitating the research. 

 

If you have any questions or comments about this research project, please contact research@frc.org.uk.

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