The governance situation at the FRC is in a pretty poor state, according to the chairman-designate of the accounting watchdog.
Jan du Plessis told the BEIS select committee at the pre-appointment hearing: “They haven’t had a permanent chair for goodness how long, they have three non-executive directors; it really is not the way to run the regulator that should be setting the tone for the whole of British business.”
He said it is not good enough, and if appointed one of the first things he will do is address the governance issues.
Du Plessis felt it is important to establish the new body as soon as possible – the Audit, Reporting and Governance Authority (ARGA). “It’s important because it is time for a new beginning,” he explained.
That means demolishing the FRC and starting afresh. Du Plessis said if we want to be serious about avoiding the corporate failures of the past, then what is needed is new legislation that gives real statutory powers. “This can’t be just a rebrand”, he stressed.
He also emphasised that the people at the top of the Big 4 have to be ready for change, and unless they play their part “the outcome could be much worse for them”.