HIGH-PROFILE STAFF moves at the Financial Reporting Council (FRC) indicate changes are afoot as the regulator’s reform consultation plods on.
Cameron Scott, executive counsel of the Accountancy and Actuarial Discipline Board, has tendered his resignation and chief executive Stephen Haddrill revealed a new director of strategy role is in the pipeline.
The strategic post will be advertised this week and proves the regulator is directing its focus – and resources – towards increased international dialogue.
Haddrill (pictured) noted many FRC interlocutors such as US watchdog the SEC and global standard setter the IASB are “more joined up” than the UK regulator’s current seven-board incarnation.
Proposed reforms would see it consolidated into an executive board overseeing two sub-boards, one focused on standards and policy, the other on codes of conduct.
Haddrill said rejigging the FRC to make it more “streamlined” and consolidate its power will support it in discussions with other regulators and political stakeholders.
The new strategic post shows resources are already being redirected to boost the FRC’s international standing before the regulator receives comments in its current reform consultation.
Haddrill argued that the consultation is “not just for show”, pointing to the “open questions on our remit” that stakeholders can use to direct the FRC’s future focus.
“We like to have a high degree of consensus in our work, but sometimes we do have to take independent decisions,” he continued.
The second focus of the reform is discipline, with the FRC seeking to increase its power to investigate firms and issue sanctions independently of the institutes.
Given the clear strengthening of the AADB’s function, it is interesting that Scott has chosen this moment to return to private practice.
The AADB budget leapt notably this year and levies for its work have risen, despite overall FRC levies dropping 7%.
If institutes do relinquish some of their power to the regulator, the AADB executive counsel role will become even more important, so why is Scott throwing in the towel?
Perhaps he does not agree with the proposed reforms, which would see the seven sub-bodies consolidated into advisory groups charged with providing information to the three decision-making boards.
Haddrill said FRC members who had expressed doubt about the power shift are “now more comfortable with it” and said the inclusion of a main board member in each advisory group would “provide assurance that their advice is listened to”.
He denied that any FRC member is leaving as a result of the changes.
Perhaps Scott is simply missing private practice and is ready for a career change, as suggested by an FRC spokesman. Or maybe he has a good idea of what the watchdog will look like at the end of the reform and it doesn’t fit with his aspirations.
Haddrill said his vision is for a “leaner regulator known for being proportionate and respected for staying close to what’s going on in the market, especially investor interests”.
With new faces in the FRC’s two key areas of reform and the consultation ongoing, it is difficult to say what the watchdog will look like in a year’s time.
However, it seems some people have a fairly good idea and these job changes offer a tantalising glimpse of the upheaval behind the scenes.
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