Restoring Trust in Audit and Corporate Governance

Restoring Trust in Audit and Corporate Governance
Print Friendly, PDF & Email

How often do we all ask ‘Who is holding company directors accountable for their actions (or lack of actions)?  The failures of big companies in recent years, including Carillion, Thomas Cook and BHS, have rocked the confidence of both the public and investors.  When big companies go down, the impact is felt by many smaller businesses, and by many individuals too when thousands of jobs are lost.  As tax payers, we are all penalised when businesses fail. 

The UK government proposal to improve audit and corporate governance

The UK government launched a 16-week consultation on proposals to improve audit and corporate governance, to improve the regulation of business and safeguard jobs.  Company directors will have to ensure accounts are accurate, or face more serious penalties, including fines or suspensions for deliberate or negligent wrong-doing.  Directors may be required to repay the bonuses they have received if failure occurs up to two years afterwards.  There may be a requirement for annual ‘resilience statements’ to be published, explaining how the company is managing key risks.  There are also plans to break up the dominance of the ‘Big Four’ audit firms.

Ultimately, the aim is to strengthen the UK’s position to attract investors, and to improve focus on the long-term success of businesses, for the benefit of all involved.  It is proposed that a new regulator will be established, ‘the Audit, Reporting and Governance Authority (ARGA), replacing the Financial Reporting Council (FRC). It would have legal powers to take action when serious lapses have occurred.

The consultation is open until 8 July 2021. (Edit: Now closed)

Some useful reading –

Did you know?

You can join the Leading Governance website as a member? Members get access to thousands of pounds worth of essential Governance materials to build their own Governance Manuals, from Sample Board Agendas to Board Member Review templates and much more (see our video here)! Click here to see more about Membership and join our community.

See more of our recent blog posts below!

Join the Leading Governance website today

Becoming a member of the Leading Governance website provides access to all of the practical guidance documents, tools and templates we have developed over the years in one easily accessed ‘One Stop Shop’ for governance materials.

Click below to learn more.

Do you need support or training for your board? Leading Governance specialises in Governance Reviews and Board Development. Get in touch here for a call back.

Recent Posts

Did you know?

You can join the Leading Governance website as a member? 

Members get access to exclusive governance content to help run their boards. Click below to read more about it and book a free consultation about our website membership.