Regulators should have greater powers to hold companies to account for lax standards in corporate governance and reporting, a poll of the British public has suggested.
The conclusions were within the Financial Reporting Council’s report entitled ‘Understanding citizens’ views on the regulation of corporate reporting, corporate governance and audit’. The research was compiled from the views of around 60 participants, sitting in three citizen juries in the UK cities of London, Edinburgh and Coventry.
The FRC found that today’s citizens would like companies to act in their interest and favour legislative changes to compel them to do so.
Specifically, those taking part in the research felt that companies should take into account wider stakeholders beyond shareholders and consider their impact on local communities. Respondents also said that organisations should improve board diversity and prioritise transparency in public communications.
Despite this, investors that participated in the poll felt that ethical considerations should come second to making the greatest possible return on their investments.
“It’s all about knowing the security of your investment,” one participant in the London panel stated.
Following publication of the report, a spokesman for the FRC said: “Almost everyone has an interest in the success of UK companies whether as an employee, a direct investor, a pension fund member or an interest-bearing account holder, and therefore in the effectiveness of the FRC as a regulator.
“As well as more power, participants thought the regulator should hold individuals and companies to account to deter wrongdoing. They also believed the Regulator and companies should operate in the public interest.”