Sir John Kingsman, chairman at Legal and General, has criticised the government for failing to support the Financial Reporting Council (FRC).
Writing in The Times, Kingsman highlighted the fact that by October, the accounting regulator’s board will consist solely of three non-executives.
This follows last year’s exit of Sir Jon Thompson, chief executive, and Keith Skeoch, interim chair, who is due to step down from the position later this year.
Kingsman called the personnel losses “indefensible” for a body that is “responsible for promoting good corporate governance”.
He claimed that the government has “inexplicably still not begun the process to appoint a successor” despite Skeoch’s imminent departure.
Kingsman added: “This is no way to govern, let alone strengthen, a major regulator whose work is fundamental to trust in companies, accounts and the working of markets.”
The L&G chair had recommended in 2018 that the FRC be replaced by the Audit, Reporting and Governance Authority (Arga), a watchdog with broader powers.
While he recognised the efforts of Kwasi Kwarteng, secretary of state for business, energy, and industrial strategy, in recommending to parliament to “give the new regulator the power it needs”, the entity is not set to launch until 2023.
Kingsman said: “I also welcome the government’s interest in deregulatory ideas, for instance stripping back annual reports.
“However, the measures to strengthen the regulator’s powers, and to bring in a robust internal controls regime, are fundamental to what my report was seeking to achieve.”