FRC Backs Growth in New Three-Year Plan
News types:
Published: 20 March 2025
Following consultation and engagement with stakeholders, the Financial Reporting Council (FRC) has today published its Strategy for 2025-28 and its Annual Business Plan and Budget for 2025-26. This is the first three-year strategy delivered by the regulator since 2023 and sets out a series of important changes intended to continue to support businesses and the government’s mission to promote UK economic growth and investment.
The refreshed strategy makes it clear that the FRC is dedicated to serving the public interest while actively supporting UK economic growth through smart, targeted and proportionate regulation. A key focus is improving businesses' access to capital by maintaining a regulatory environment that is underpinned by trust and confidence in audit, corporate reporting and corporate governance. These are all critical factors for investors and other stakeholders who rely on them to thrive and grow, such as pension holders, suppliers and employees.
The strategy outlines some key projects reviewing how the FRC undertakes its inspection and supervision of audit firms, its approach to enforcement and holding auditors to account when failings are identified.
It also outlines how the FRC supports smaller firms to build capabilities through the FRC’s Scalebox initiative, which will expand to work with audit firms and others on new innovative approaches that can support growth and investment. This will put a spotlight on the audit market for small and medium enterprise businesses to ensure it is working properly for those who rely on it.
The FRC’s strategy will build on the approach it adopted in its recent review of the UK Corporate Governance Code where it stripped back guidance and unnecessary requirements and put much more focus on Boards owning their own governance, using the flexibility within the Code to comply or explain with the provisions.
The FRC welcomes the strong endorsement from stakeholders on its direction and priorities through the consultation process, particularly regarding its enhanced engagement approach that ensures we regularly and extensively engage with our stakeholders on regulatory changes.
Richard Moriarty, FRC CEO"If the FRC as a regulator is to encourage economic growth and investment, I believe it is important we support responsible risk-taking, not seek to eliminate it. Our strategy puts this principle at its heart whilst ensuring we continue to encourage high standards in corporate governance, reporting and audit, which are vital foundations for businesses in accessing capital and broader stakeholder support to thrive.”
This strategy comes as the FRC continues to prepare for draft legislation to modernise its statutory powers and ensure they remain fit for purpose for 2028 and beyond. The FRC also notes the government's recently published action plan for regulation, which highlights strengthening accountability through formal performance reviews, and the FRC will work with DBT to develop its approach to these accordingly.
| Name | Annual Plan and Budget: 2025-26 |
|---|---|
| Publication date | 20 March 2025 |
| Format | PDF, 1.5 MB |
| Name | FRC 3-Year Strategy: 2025-28 |
| Publication date | 20 March 2025 |
| Format | PDF, 2.2 MB |
| Name | Feedback Statement |
| Publication date | 20 March 2025 |
| Type | Feedback paper |
| Format | PDF, 190.8 KB |