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FRC wants the right to sanction all directors
The UK’s biggest public companies have been put on notice – the Financial Reporting Council (FRC) wants to be able to take disciplinary action against all individuals for breaching financial reporting rules.
The watchdog currently can only sanction accountants, auditors and actuaries, but is asking the government for the ability to sanction all listed company directors.
The FRC has announced formal plans for a fundamental review of the UK Corporate Governance Code. This will take account of the work done by the FRC on corporate culture and succession planning.
It said the review will build on the code’s globally recognised strengths developed over the past 25 years, while considering the appropriate balance between its principles and provisions and the growing demands on the corporate governance framework.
Responding to the Government’s Green Paper on Corporate Governance Reform, the FRC highlighted the importance of helping boards take better account of stakeholder views, linking executive pay to performance. But the request to extend its enforcement powers to ensure that disciplinary action can be taken against all directors where there have been financial reporting breaches will have raised a few eyebrows in boardrooms around the UK.
• The FRC has been busy recently. To catch up on what’s happening make sure you read the next issue of NQ magazine – out now.
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