December 21, 2015 New Year, Strong Governance
How do you approach the turn of the year? Is it a time to drive sales or a time for winding down; a time to finalise annual accounts or a time to plan? Whatever the answer, it’s a fair bet it will be influenced both by your business sector and your business structure. It’s also a fair bet that whatever your plans for 2016, they will be influenced by the approach to high quality corporate governance promoted by the Financial Reporting Council (FRC).
With this in mind, it was interesting to note the FRC’s draft strategic plan for 2016/17 which was published today (21 December 2015). Representing the start of a new three-year strategic programme, the FRC is calling for comments in respect of its proposals. Launching the consultation Stephen Haddrill, the FRC’s CEO, said “Our work continues to be guided by our mission, which is to promote high quality corporate governance and reporting to foster investment.”
In its draft strategic plan the FRC has outlined four priorities;
- To establish and make the most effective use of its new role as competent authority for audit regulation
- To focus on corporate governance best practices and the promotion of strong corporate culture
- To help smaller and AIM listed companies to improve the quality of their reporting and to work on embedding recent reporting changes
- To review its oversight of the actuarial profession and complete its updated framework of actuarial standards
One highlight of the strategic plan which may appeal to small entities in particular is the fact that the FRC are aiming to avoid making any further changes to the corporate governance code in the next three years. However, that doesn’t mean that businesses can afford to ignore the code; the changes which have already been introduced look towards clear and fair reporting and the FRC will continue in its endeavours to promote good practice in accordance with its stated aims.
Similarly, the FRC intends to continue with its mission to promote effective company culture as a means to deliver strong corporate governance. Building on its 2015 initiative to gather practical insight into corporate culture and the role of boards; the FRC intends in 2016/17 to issue best practices and develop ‘how to’ resources in order to help boards across a range of sectors and industries to take effective action on culture.
The FRC’s consultation into its plans closes on 12th February 2016 with a finalised budget and plan to be published in March.