The UK Government has launched an independent review of the Financial Reporting Council (FRC) to assess its role, powers and independence.
The review aims to increase the transparency of the FRC and its independence from those which it regulates and to assess whether the FRC can carry out its function without any conflict of interest or the ‘perception’ of conflict of interest.
Its last review was conducted in 2011/12 and since then there have been changes to regulation and in the expectation of how regulators operate. Due to this, there have been calls from various stakeholder groups asking for the FRC to demonstrate greater independence.
The review will be led by UK Research and Innovation chair John Kingman, who will be supported by an advisory board, and is set to be completed by the end of 2018. The review process will also include a public consultation.
UK business secretary Greg Clark commented: “The UK has a strong reputation as a dependable place to do business but this needs to be continuously updated and it is important to ensure all of our regulators continue to drive high standards.
“I am pleased to appoint Sir John who has a rigorous approach to bring to bear in leading this comprehensive review of the Financial Reporting Council. This review is part of the government’s Industrial Strategy aim of creating a business environment that ensures our regulators are fit for the future and our markets are working for consumers.”
Following the announcement of the review, the FRC stated its support. FRC chair Win Bishcoff said: “We welcome this independent review of the FRC’s governance, impact and powers to be led by Sir John Kingman and look forward to contributing positively to it.
“Meeting public expectations means using our powers effectively, working closely with other regulators and identifying where gaps in those powers exist.”