Supervision of corporate reporting

Original recommendations

The Kingman Review recommends that the new regulator should be given a power to direct changes to accounts rather than having to go to court. (Source: Kingman 25)

The Kingman Review recommends that CRR findings are reported publicly by the regulator. The regulator should publish full correspondence following all CRR reviews, and the findings should be published in a set timeframe. (Source: Kingman 26) 

The Kingman Review recommends that the stronger corporate reporting review process described earlier should be extended to cover the entire annual report, including corporate governance reporting. This should be done on the basis of risk. (Source: Kingman 29) 

The Kingman Review also recommends that the Government, working with the Financial Conduct Authority (FCA) and the new regulator, should consider whether there is a case for strengthening qualitative regulation around a wider range of investor information than is covered by the FRC’s existing corporate reporting work, to ensure that disciplines to drive up the quality of companies’ disclosures in the UK are at least as demanding as best practice internationally. (Source: Kingman 30)


The Government will replace (Section 4.2) the regulator’s current power to seek a court order with a power to direct changes to reports and accounts. The Government will give the regulator powers allowing it to publish correspondence entered into during the course of a CRR review, as well as summary findings. The Government will also legislate to extend both the existing power to request information from companies and the new power to direct changes to accounts to cover the entire content of the annual report. The Government has asked the FRC to undertake a pilot study of preliminary results and investor presentations, working with the FCA, to establish the extent of any inconsistencies between this information and the subsequent annual report and accounts. The FRC, FCA and the Government will review outcomes from the study once it is complete. If the conclusion is that applying the CRR process to a wider range of investor information has the potential to increase its quality and reliability and help strengthen the existing market supervisory regime, it should become a permanent feature of the regulator’s work. If that is the case, and subject to any further views from consultees, the Government will ensure that the regulator is given the additional powers needed to undertake this work effectively.

Government response

The Government intends to ensure that ARGA can direct changes to company reports and accounts, rather than having to seek a court order, along with powers to publish summary findings following a review. In addition, the Government will extend the regulator’s powers to cover the entire contents of the annual report and accounts so that it can review areas that are not currently within scope, such as corporate governance statements and directors’ remuneration and audit committee reports as well as voluntary elements such as the CEO's and chairman’s reports.

Correction list for hyphenation

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