New research from the Financial Reporting Council (FRC) has found that people believe the FRC should have more “power” and “teeth” to hold companies to account.
The independent research, conducted on behalf of the FRC by BritainThinks, involved in-depth research with members of the public across the country.
It said that “almost everyone” has an interest in the success of UK companies whether as an employee, a direct investor, a pension fund member or an interest-bearing account holder and therefore has an interest in the effectiveness of the FRC as a regulator.
The discussion-based approach, known as citizens’ juries, allowed participants to be presented with, and have time to “discuss and interrogate”, information about corporate reporting, corporate governance, audit and the FRC’s work in these areas.
As well as more power, the study found that participants thought the FRC should hold individuals and companies to account to deter wrongdoing. They also believed the regulator and companies should operate in the public interest, taking into account the views of wider audiences, including employees, and improve diversity on boards.
The citizens also thought that the FRC should maintain its independence from those it regulates “at all costs”. Participants added they felt it was “particularly important” to ensure the independence of non-executive directors and audit partners from the companies they work with.
In addition, it said that while citizens’ initial views of companies tended to be negative with “greed and corporate misdemeanors front of mind”, when considering the impact companies can have on the UK, particularly on the economy and local areas, participants had more positive perceptions.
In particular, participants highlighted the importance of companies in providing employment, products and services, and investing in the UK.