UKSA Welcomes Financial Reporting Council Restructuring

Following the Financial Times' report (March 15th, 2012), 'Opponents of FRC revamp thwarted', the UK Shareholders' Association has welcomed the news that the Financial Reporting Council is now independent from the professional bodies which did so much to found it, but came to exercise an influence that has not always been in the interest of investors. "It is to be hoped," says Eric Chalker, UKSA's policy co-ordinator, "that this will lead to greater attention to the needs of those who are the recipients of company reports, especially private investors whose needs have tended to be disregarded in the past, despite declarations to the contrary."

The 'revamped' FRC should bring benefits to investors in general, by increasing its effectiveness. At the same time, however, UKSA notes that the FRC is now seen as a government agency, which may not always be a benign condition. Despite the FRC’s newfound 'independence', there will be significant government influence over its work, which in due course may need to be scrutinised and even mitigated in order to ensure that the interests of investors are protected — especially private investors, whose numbers and influence the government ought to be encouraging.