Paul Boyle, the man who captained the UK’s modern reporting regulator through its infancy and a near-unprecedented global downturn, has finished his time optimistic about the future and with no regrets.

The Financial Reporting Council (FRC) chief executive hung up his cap last week and reflected on five years spent keeping accountants in line.

In January 2004, Boyle walked out of one regulator and into another. Lured away from the Financial Services Authority (FSA), he took on the chief executive position heading up a new-look FRC just given sharper teeth in the wake of the Enron and WorldCom scandals.

“When I moved to this job, hardly anyone had heard of the FRC and it had a very limited set of activities ­ some people thought it was quite a strange career move,” he said.

Boyle’s time at the FRC ended last week with a whimper not a bang, perhaps reflecting the organisation’s preference not to regulate by table-thumping but instead to steer market behaviour with subtle signals.

When asked, he chooses to measure his performance against criteria articulated in Accountancy Age’s April 1, 2004 Comment column which said: “The FRC will need more than a combination of sound preparation, fortuitous timing and the support of the accountancy great and good to make it a success.”

Boyle, reading the 2004 editorial, believes he has met and in some cases exceeded expectations. The editorial argued for the FRC to play a bold role and secure a presence in international accounting debates, achieve early triumphs and become more than the sum of its part.

On reflection, Boyle believes he has, in some way, met all three objectives. “Relative to its size the FRC is regarded as a thought leader internationally… and I think we have shown there are real advantages to have, inside one organisation, the responsibility for both setting standards and monitoring… and while it’s quite hard for regulators to claim triumphs, unlike others, we have avoided disasters,” he said.

“That’s what Accountancy Age told us to do and that’s what we have done.”
He also prides himself on running a lean but effective FRC, which has seen costs for core operating activities rise from £10m to £12m in five years. In comparison, the FSA’s net costs for ongoing regulatory activities came to £335m this year. One ongoing mission he has struggled to address is the domination by the Big Four accountancy firms of high-price audits.

“It certainly is a challenge that can’t be overcome easily and it cant be overcome by the power of the FRC ­ there are wider issues,” he said.

His fear is that the collapse of a single Big Four auditor will paralyse the markets. “We have a choice ­ we can either try to create a more dynamic market at a time when there is no crisis or we wait until a crisis occurs and then we have to do things in a panic situation,” he said.

He said he has no immediate plans for the future, but is keeping his options open. “I’m waiting for a good job offer,” he said.

IN OUR VIEW

It’s hard not to measure the performance of the FRC under Boyle through the prism of the global financial crisis.And it can be said that while other regulators around the world came under heavy fire, Boyle and the FRC, largely escaped blame. Perhaps this alone can be seen as a triumph. Many of Boyle’s initiatives are work in progress.

Further reading:

Auditors caught in Rover headlights

As Boyle steps down audit is at a crossroads