1. The FRC is not fit for purpose“[H]aving spent most of its life in obscurity,” Kingman said, “the FRC now finds itself subject to tough and persistent criticism,” which have put it under an “unprecedented spotlight”. He said close attention had revealed the FRC to be “an institution constructed in a different era – a rather ramshackle house, cobbled together with all sorts of extensions over time.” He found some of the FRC’s critics “overstate their case”, but said it had taken an “excessively consensual” approach to its regulatory work. Kingman said the watchdog needed to be rebuilt from the ground up, with “a clear and precise sense of purpose and mission”. He also strongly criticised the FRC’s propensity for media leaks, which have led to several of its decisions appearing in the press ahead of their official announcement.
2. The FRC has serious problems in how it recruits top staff
Kingman said the FRC board and staffing needed an overhaul, describing its approach to board and council recruitment as “surprisingly, and inappropriately, informal”. He said the watchdog was “often not employing open advertising or using headhunters, and sometimes even relying on the alumni networks of the largest audit firms”. “Of the 21 vacancies in relevant positions between 2016 and 2018 only one role was advertised in the national press, and just six involved external search consultancies,” he found. He said the regulator “has some excellent people”, but that its next chief executive after Stephen Haddrill leaves next year will have a “very big culture-change job to do”. He suggested that though many members of the FRC would transfer to Arga under his proposals, there should be a “limited” overlap in senior management, and that its new board should be much smaller.