Why are standards important in regulating leadership and corporate governance? The key areas that the FRC sort of takes to heart from its mission are to promote high quality corporate governance and reporting. It’s really no coincidence that the two phrases are linked because providing transparency around what an organisation is doing, how it’s going about it, the culture, etcetera we believe drives the right behaviour.

Why is transparency important to developing trust within the investment community? I think you used the key word which is around trust. Particularly post the financial crisis but not just as a consequence of the financial crisis, there is a lack of trust in business. I think business recognises that it’s got to tackle that. That’s not a sustainable position to be in. It can’t really be the case that people who work for business and develop business are sort of business by day and then they become society at night. I think there is a general sense of determination and goodwill for us to work as a society through business to actually work on that trust agenda.Someone once said to me that trust and transparency go hand in hand and I believe that they do.

How can companies balance large amounts of data, transparency and clarity in reporting? Since last year [we’ve] had to sit down and say ‘Is this whole report’s accounts fair, balanced and accountable?’ And we’re told by many that these are the three most powerful words that we’ve ever written because it has forced boards to actually take a stand and reflect on what they’re doing and wether it needs to change. We’ve done that by actually setting that as a requirement on a comply or explain basis but we’ve actually not got any further guidance out there, we certainly haven’t written any standards around it. When I’m asked what does it mean I say ‘Well, I do have a dictionary!'

What is your response to the problems Tesco is facing? Obviously there are investigations going on on Tesco which is public information that we are monitoring the situations and have said that there are particular individuals and firms that we are investigating in the context of our remit. That said, I think we’ve said quite clearly that you do need to focus in terms of corporate governance and corporates on the culture, on the tone and tenor from the top matters. So that means that it’s the responsibility of the board to ensure that the sort of behaviour that they would wish to go on is embedded throughout an organisation.

What is in store for the future of the FRC? We consult annually on our plans and then every three years we consult on our strategy. Currently we’ve got our consultation for our 15th-16th year is open. We’ll be holding an open meeting about it and then later in the year we’ll be setting out a three year strategy. In terms of some of the more longer term areas that we will look at, we are very aware that the current regime of reporting wasn’t quite invented when there were quills but the printing press had been invented! Communication technologies move on apace. So we’ve got projects in hand to look at what the impact of technology should be right across the corporate reporting space. In the future, we’re likely to be looking at digitisation of the annual report and accounts, but also looking at wether that concept of annual report and accounts is based on the printed page and is that something that should be more digital?
 

What is the one thing that people developing corporate reports should know about regulations and why? The important thing is that the regulations are designed to produce or encourage communication where it’s relevant.... The other thing I would do is to encourage people to be innovative. I’d just encourage people to be bold.