FRC chair leaves after eight months

Simon Dingemans, chair of the Financial Reporting Council (FRC), is leaving after only eight months at the regulator, which is in the midst of major reforms to strengthen its structure and powers ahead of a planned overhaul of the structure of the audit market

Dingemans joined the FRC in October last year, taking over from former chair Sir Win Bischoff who spent six years in the post, alongside former HMRC CEO Jon Thompson who replaced Stephen Haddrill as chief executive.

The pair were charged with reforming the FRC, which had come under fierce criticism from the Kingman review and MPs following a series of high profile audit failures.

At the time, as the role of chair is a part-time position, it was agreed Dingemans could take on additional roles provided they did not conflict with his responsibilities at the FRC.

This week the regulator said: ‘This has not proved possible and so it is with regret that Mr Dingemans has informed the board and the secretary of state that he intends to step down from the FRC at the end of May.

‘He is expected to return to a more full-time role in the private sector.’

The Department for Business, Energy and Industrial Strategy (BEIS) has started the process of seeking a new FRC chair.

Dingemans, who was CFO of GlaxoSmithKline and previously a managing director and partner at Goldman Sachs, has quit the post at a critical point for the regulator, which is set to transition to its new regulator status as the Audit, Reporting and Governance Authority (ARGA).

The audit regulator is under huge pressure to tighten up controls on the UK audit market, following a series of damning audit investigations of Big Four firms, which have led to multimillion pound fines over audit performance at major listed companies.

It also needs to respond to the recommendations of the Competition & Markets Authority (CMA) report on the audit market, with included wide-ranging reforms with the possible introduction of joint audits and even a hiving off of audit practices at the largest audit firm.

The government still needs to legislate for the creation of the ARGA, which requires a statutory instrument, but this has been substantially delayed, first because of the Brexit overload on parliamentary time, and now because of the pandemic. There is no indication as yet of when this will happen.

A BEIS spokesperson said: ‘We are grateful to Simon Dingemans for his leadership of the FRC.

‘The day-to-day running of the FRC will continue under Sir Jon Thompson, and we will announce next steps on recruitment in due course.’

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