FRC to consider how its corporate governance principles meet the needs of stakeholders
In a speech, Sir Winfried Bischoff, the chairman of the Financial Reporting Council, set out the FRC's response to the Government's drive to make business work for all stakeholders and to the challenges posed by the vote to leave the EU.
The FRC is currently considering how its governance principles best meet the wider demands of all stakeholders or need to be amended. It is likely to consult next year if the inquiry being conducted by the Business, Innovation and Skills Committee and the expected consultation by the Government on corporate irresponsibility suggests a role of the UK Corporate Governance Code.
The FRC's main priority is to ensure that the UK remains "a global centre of excellence for accounting and audit, and a magnet for global investors' capital". Investors want comparability between the accounts of UK-listed companies and those listed elsewhere so the FRC will continue to apply and enforce international accounting standards. Although there was no mood to reverse new EU audit rules, the FRC may tweak audit standards to ensure UK-based auditors continue to lead the world in quality. There may be a need to agree arrangements for equivalence of audit qualifications and portability of staff but this was not just an EU issue and some of FRC's focus will be to ensure access to US, Canadian and Asian markets.
The speech can be found here.