FRC launches consultation on governance changes to its Enforcement and Operating Procedures

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02 Oct, 2020

The Financial Reporting Council (FRC) has launched a consultation on consequential amendments to the Conduct Committee’s Operating Procedures and various Enforcement Procedures arising as a result of changes to its governance structure.

Following Sir John Kingman’s recommendations, the FRC Board has reviewed its sub-board governance structure and decision making in relation to enforcement investigations and intends a number of governance changes to take effect on 1 January 2021.

The key drivers behind the resulting governance structure changes are to enhance the effectiveness, speed and responsiveness of the organisation; shift the organisation to an ‘Executive Led’ approach; reduce layers of management and Committee review and create clearer accountability; enhance transparency; align the governance structure with a new FRC business model and management structure; and refocus Board time to effectively challenge and hold the Executive to account.

The governance changes approved by the Board are to take effect from 1 January 2021. Changes include:

  • Five Committees of the Board to support the Board. These will be:
    • Supervision Committee (new);
    • Conduct Committee;
    • Regulatory Standards and Codes Committee;
    • Audit and Risk Committee; and
    • People Commiteee.
  • Removal of the sub-committee structure to be replaced with a broad Advisory Panel that the Executive and Board Committees can call upon for specialist advice and input on a targeted basis.
  • Senior Advisors to be appointed for a set number of days a month to sit as standing advisors to the three regulatory Board Committees (Regulatory Standards and Codes, Conduct and Supervision) and be available to advise the executive.

As the governance structure changes require minor consequential amendments to a number of the FRC’s regulatory procedures, these are being put to consultation. Comments are requested until 30 November 2020.

A press release and the consultation are available on the FRC website.

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