Responding to proposals in the Kingman Review into the function of the Financial Reporting Council, Roger Barker, Head of Corporate Governance at the Institute of Directors, said:
“The review was right to be tougher on audit – if recent corporate events have shown anything, it is that the regulator needs more teeth to act when necessary.
“But a different approach is needed for corporate governance oversight than is needed for audit regulation. At first glance, the Review would appear to suggest outsourcing the role of shareholders to the FRC, which could jeopardise the UK’s effective and collaborative approach to governance.
“Corporate governance risks being seen as merely a supplement to auditing, when the opposite is true. We need to toughen up audit regulation, but let’s not throw the baby out with the bathwater by viewing corporate governance as a question of compliance.”
IoD’s submission to the Review can be found here