December 21, 2014 Reporting clarity
At the end of November we reported on the Bank of England’s plans in respect of a new regulatory framework for senior insurance managers. Now the same authority, in conjunction with the FCA, have turned their attention to the banking arena with a consultation paper entitled “Strengthening accountability in banking: forms, consequential and transitional aspects” which itself follows on from an earlier paper.
In line with current thinking the proposals are “intended to create a new framework to encourage individuals to take greater responsibility for their actions, and will make it easier for both firms and regulators to hold individuals to account.” It is hoped that this will have “a positive impact on individual behaviour and the general culture within firms.”
Although this consultation relates to those organisations which have been authorised under the Financial Services and Markets Act it does include some best practices which may be of interest to other organisations. We have discussed in the past the merits of clearly allocating key areas of responsibility to named individuals as a means of improving accountability and this is a theme which runs through the consultation document.
Allocating key areas of responsibility, clear and concise reporting, fairness and openness; these have all been the dominant messages from the regulators in 2014. At the heart of the debate is the desire for every organisation of every size to recognise the responsibility which it has to consumers and investors alike. The era of the closed, internalised organisation gave rise to businesses which put short-term profiteering ahead of long term stability to the detriment of investors, consumers and the businesses themselves.
Now the tide has turned with openness, clarity and fairness being put firmly at the heart of the business world. Will this cause a problem for businesses in 2015? Not if the business is well run with strong internal controls and an outward focus on consumers, investors and the wider world.
Companies House has issued a reminder to the 300,000 companies that are due to file their accounts by the end of December. They urge those companies which can file their accounts online to do so but for those who are still reliant on paper filing Companies House recommend sending returns as early as possible by guaranteed next day delivery. Those reliant on paper filing include:
- small companies who wish to file abbreviated accounts with a special audit report
- medium sized companies taking disclosure exemptions
- limited liability partnerships (LLPs)
- community interest companies (CICs)
- companies preparing IFRS accounts