FRC restructure introduces two new functions
Published: 8 July 2024
9 minute read
In this episode, Kate O'Neill, Director of Stakeholder Engagement and Corporate Affairs, Laura Warren, incoming Director of the Market Intelligence & Insights function and Philip Fitz-Gerald, incoming Director of the Digital Reporting & Taxonomies sit down to discuss the reason for the new functions, what work they'll undertake and how the functions will benefit both the FRC and the market.
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Transcript
FRC restructure introduces two new functions
0:09
Welcome everyone, to another FRC in Conversations podcast. My name is Kate O'Neill, and I'm the Director of Stakeholder Engagement and Corporate Affairs here at the FRC. And today I'm joined by Laura Warren, Phil Fitzgerald to talk about some recent structural changes we've made here at the FRC and how that's going to not just enhance the work of the FRC, but also affect our stakeholder universe and the work that will be planning to do in a slightly different way going forward. Welcome, Laura and Phil.
0:39
So just before we jump in there, we're announcing today and have put out a subscriber note to this effect that we've established two new functions of the FRC. One is the Market Intelligence and Insights function, and that's going to be led by you, Laura, and the other is the Digital Reporting and Taxonomies team reporting to you and headed up by you, Phil. So how did we get to this place I guess because these are restructures that are probably the first for a long time at the FRC, but what are the key benefits that you think these new structures are going to deliver for the FRC stakeholders and indeed help us deliver better on our remit?
1:19
Laura did you wanna kick off. Yep. So really excited to be talking to you today about the new market intelligence and insights function. And the aim of this really is to make sure we have a holistic, evidence led research and analysis to support the entire FRC strategy, policy development and implementation. So it's really about providing intelligence across the whole of the FRC's remit where it's needed and making sure we combine this to provide deeper insights to support our policy development and monitoring work across all areas that the FRC is responsible for. It means that we'll understand our markets, that we regulate in our interventions a bit better. We'll be able to support innovation and growth. We'll be able to promote
1:58
competition and resilience in the markets we regulate and we'll be able to provide analytical support and expertise across the organisations. Very exciting and a good new development through which to build on our existing work and our capabilities in this area. Thanks, Laura, and Phil, before I come on to you, I mean this really reflects the growth not just in headcount, but in the remit and the type of roles that are undertaken across the FRC as we look to the future, I mean there's this one of the drivers for putting together the market intelligence and insight function. I guess in summary, things have got more complicated, they're more nuanced and layered. Absolutely, there's a lot
2:38
going on out there and we really need to understand what it means. We need to understand our markets, we need to understand innovation and growth. We need to understand the impact of our work. And it's also about ensuring we're configured in the most effective way. So we need to be able to be securing operational efficiencies through better resource sharing and prioritisation. So bringing together a range of activities, our economic analysis, our research, our competition policy, our data analytics under this one team will enable us to do that. Great. And Phil, moving on to your new role, Director of Digital Reporting and Taxonomies team. I mean, you've been talking about digital reporting for some time
3:17
through the labs work, but it's not going away anytime soon, it's an area of increasing importance. So why did the FRC decide to establish this dedicated team? So first of all, also delighted to be here to be able to talk to you about the establishment of this team. Digital reporting, as you say, is becoming increasingly important and actually increasingly required in the reporting environment that we're operating in. We're very much moving from the paper based system of reporting towards a more digital era and there are a number of things happening in the market, companies, houses, moving to fully digitised reporting. The FCA for the last two years has mandated digital reporting,
3:57
and we really need to have more of a focus on how we enable that, how we make sure that the data quality is high, how we make sure that now we've got all of this data, are we using it effectively? Are our markets using it effectively? So I'm really delighted that establishing this, the FRC is putting some more focus on this work. As you know, we've been enabling digital reporting for a number of years, but actually there's going to be a lot to do with some of the changes that are coming, and we need to be positioned to be able to do that. And I'll come back to data in a minute because it's a question for both of you. Phil, can we remind some of our listeners who may have forgotten or maybe are not familiar with what
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taxonomies are? Yeah, certainly. So at a very simple level, taxonomies are a way of digitising reporting standards. So they enable the digitization of reporting standards. And what that means is that the information that is reported can be effectively understood by machines, and that creates an environment where the information can be better analysed, better reported in a much more efficient and effective way. We've always required digital reporting for over 10 years for tax reporting purposes, and we've enabled it for other reporting mandates as well. But increasingly that will become more of a requirement going forward. So it will create a much more
5:15
digitally enabled reporting environment going forward. And for both of you, I mean, a lot of what you're talking about, Laura and Phil in your new teams is absorbing some of the excellent work that the FRC Lab has done over the past 10 or so years. Do you think that this reflects how much some of their work has now become quite mainstream in the way you've just described, Phil, about digital reporting? It's now an absolute necessity to get right and do properly. And Laura, I'm guessing that data is not going away. It's not getting smaller data sets out there. Do you think that both of these absorption of the FRC Labs activities will really help
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therefore say look at it at a more end to end basis? Phil, do you wanna jump in first?
6:00
Yes, absolutely. So I think the lab has been very instrumental in engaging with the market to find innovative ways of improving corporate reporting. And over the years it's actually had quite a big focus on how technology will impact corporate reporting as well. So I'm really delighted that that aspect of the labs work will remain in this new digital and taxonomies team and that the other aspects of its work will switch into Laura's team and be done in a very much sort of strategic way. But I'll pass over to Laura to comment on that because the area, Laura, it seems to me that our listeners would identify very much is the market intelligence, the what's happening both from a data set perspective, but also
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anecdotally and as different themes and approaches develop in the market. Yeah, absolutely. So it's not just about the data, very important though it is, we do need the qualitative information, the rich insights and intelligence we received from engaging with stakeholders, certainly lots for us to take forward from what the lab had done, particularly as part of the new team we will have market intelligence and insights team very much focused on research, very much focused on horizon scanning. So really wanting to understand emerging issues across our markets to help support the development of the FRC's strategy and inform its wider work. And I guess from the supervisory standards,
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setting an enforcement perspective, bringing these together, these important drivers, not just of our stakeholder behaviour, but the markets in which we regulate will help the processes that they've put in place and we'll continue to refine and put in place going forward. I mean, would that be a fair summary of why this creation of these two teams has really been so timely? Absolutely couldn't agree more. So very much Market intelligence and insights team is sitting at the centre of the organisation to support the wider organisation across all its activities. So supporting colleagues working in regulatory standards, developing policy, setting standards, colleagues and supervision who are carrying out monitoring work and colleagues in enforcement
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who are busy in enforcement action. So it's very key that we are able to support all of the activity with evidence led research and analysis and ensure that we are engaging with our stakeholders in a way that understands our markets and understands the impact we have on them. And Phil, I guess we often hear about the burden of regulation reporting, etc. Some of the exciting areas that the digital reporting and taxonomies team will look at are ways to use reporting information and present it in an easier to consume, easier to use way. Yeah, absolutely. And that will be one of the focuses for this team going forward. I mean, we enable digital reporting through the taxonomies
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process. But one of the key focuses going forward for this team will actually be look at how do we make best use of the data, both for us as a regulator and that will be very much working closely with the market intelligence and insights team that Laura is leading. But also how do we make that data more accessible to the market, more easily to consume, etc. So overall, the goal will be to create efficiencies in the market and that's very much what digital reporting is seeking to achieve. And I guess I would ask this as a director of stakeholder engagement, but the key benefits of these restructures aim to deliver for the FRC stakeholder. Would it be more targeted and focused work regarding emerging
9:15
changes or issues? Laura, listening to what you've just said and Phil, really helping and enabling stakeholders to talk about themselves, but also report against standards in a more simple way that's more readily recognised. Is that a fair summary from both your perspectives?
9:31
Absolutely. For me, it's very much about having a richer evidence base for our strategy and our work and a more developed understanding of our markets and our impact on them. And that will hopefully translate them to stakeholders of understanding our rationale, where we are coming from when we are implementing changes or engaging with them in certain activities. I mean, I think I would just add in relation to this that some stakeholders will be familiar with the review of the FRC, obviously going back a few years now. But Sir John Kingman did make recommendations about the development of a robust market intelligence function and monitoring of the market. And so this is a continuation of the work that we've already been doing in support of
10:12
realising those recommendations and moves us further along in realising them. Right. And Phil, I mean, you know, it's all about helping stakeholders report better, smarter, faster and in a way that's easily recognisable by users. Yeah, I could not agree more. That's very much the approach around digital reporting is to improve that communication, make things more efficient. And we very much would like to engage with stakeholders to help that process through to help drive up data quality and help ensure that we're meeting those goals around efficiency and effectiveness of the information flow.
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Well, I know my team is looking forward to working with both of you on really helping have a focused and well thought out stakeholder engagement approach to really support the work. But both of these things that you've described in these new functions really strike at the heart of what we're hearing from so many stakeholders, from government voices through to media and others, which is about smarter regulation, not more regulation. Does that chime with what you think these restructured groups will help the FRC to really achieve in delivering on its strategic objectives? That we're going to do it smarter, not creating more burdens for stakeholders where we don't have to? Laura, I mean, do you think that
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having better intelligence will have that as a goal and potential outcome?
11:30
Yeah, absolutely. So it's absolutely key to this team to help develop the FRC's understanding of the impacts of our work on markets. We have good regulation. It allows our markets to function well. So it's very much about supporting the FRC to understand if we've got good regulation, the impact of any of our regulatory activities, making sure that we're supporting the FRC to realise its growth duty and that we are generating where relevant economic activity, innovation and supporting companies to grow and to attract investments. So absolutely integral, central to this new team. Definitely. And Phil Smiler regulation, I mean, it just screams you better use of
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digital opportunities data, making things simpler in many ways for our stakeholders, of course. And you know, the goals of this team will be very much supportive of the smarter regulation because it will enable data to be more accessible across the market. It will enable growing companies to be able to communicate more efficiently and more effectively with the market and very much in an innovative way. So it's a watch this space really, because I guess what you're both talking about is giving the FRC is a smarter regulator, more tools in its toolkit to help growth and competitiveness in the UK. And I guess a lot of that is
12:48
about accessing capital, helping growing businesses, whether it's getting bank loans, finding public or private market investment, the way in which they're operating gives confidence to those stakeholders. I mean, I would think that better information, Laurie, and your team that's used in a way that informs better supervisory enforcement and standard setting. And for you feel through this new team helping companies tell their stories, lay out their risks, talk about their financial position in a way that it's easier for them to do and easier for stakeholders to consume. I mean, that doesn't sound like two sides of a coin. It sounds like
13:27
very strong drivers for the FRC's total work package. Absolutely couldn't agree more. Very much so. And the other point is we're working in collaboration with other regulators in this space, which is a really good way of addressing kind of smarter regulation goals. So absolutely agree with you on that, Kate. Yeah, I think that's an important point for because I think it's great that we can do things and I'd splendid isolation. But I would think for both of you and Laura, working with other regulators, not just to get the learnings, but also share best practises and experience will be key to both of these functions. Well, look, I don't think it's the first time we're going to hear from either of you in an FRC in conversation. But congratulations
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on the new teams. And it'll be interesting perhaps to come back in a few months and talk about what the early months of these new teams is really concentrating on and how it's linking to the FRC strategy. So thank you, both of you.
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