The Financial Reporting Council (FRC) has published a register of interests for its senior team for the first time, which reveals that chief executive Stephen Haddrill is married to a civil servant responsible for relationship management with the regulator, while several FRC directors have pension entitlements from employment with Big Four firms
The list provides details of board and committee members’ appointments, offices and directorships currently and for the past ten years, their membership of professional bodies and trade unions, membership of an audit firm pension schemes, and ‘relevant declarations in respect of family and close personal relationships.
The FRC has made these details public in a bid to defuse recent claims that close links between former senior accountancy executives who now work for the regulator and their previous firms risk damaging its independence in conducting investigations into accounting failures.
The listing states that Haddrill’s wife is a deputy director in the Department for Business, Energy and Industrial Strategy (BEIS) and is responsible for the department’s relationship management with its partner organisations, including the FRC.
It also shows that Mark Armour, a non executive director and member of the FRC audit committee, is a member of four PwC pension schemes, and another non executive director, Roger Marshall, is also a PwC scheme member. Liz Murrall, a member of the codes and standards committee, has rights to pensions from EY and Deloitte. Sean Collins, a member of the conduct committee, has a KPMG pension. John Hitchens, also on the conduct committee, has a pension from PWC and a ‘retired partners allowance’ from the firm.
Among case management committee members, Geraint Davies belongs to Grant Thornton’s UK pension fund, and Richard Murray to the EY pension scheme.
Executive director Paul George is in the KPMG pension scheme, and fellow director Melanie McLaren is a member of PwC’s scheme, although she states her PwC pension entitlement is not material to income or assets and will be received between ages 55 and 60.
McLaren’s entry also states her son had undergraduate one-year placement with EY, not in audit practice, from July 2017. Geoffrey Green, a member of the FRC’s conduct committee and chair of both the corporate reporting review and the financial reporting review panel, declares that his brother David is the director of the Serious Fraud Office.
As well as the register of interests, the FRC has published its governance bible, setting out the organisational structure of the regulator and explaining how its committees work and how cases are handled.
The move to publish a register of interests was signalled by the FRC’s chair, Sir Win Bischoff at the annual open meeting in September.
At the time, Bischoff said: ‘Such a register is important for the FRC to retain confidence in how it reaches decisions, particularly on enforcement matters. The decision announced earlier this week to end the investigation into KPMG’s audit of HBOS has been questioned by media and politicians, and it has attracted questions about our independence.
‘It is vital that these decisions are taken based on the available evidence rather than on political considerations or public clamour. Our robust policies and procedures on conflicts of interest ensure those decisions are appropriately made by the executive counsel.
‘Many of you, but not all commentators, know that the board of the FRC has no role in taking enforcement decisions. Publishing our policy and our register of interests should further remove doubt about the objectivity of our decisions.’
FRC list of interests is here.
FRC governance bible is here.
Report by Pat Sweet