Former BT chairman du Plessis in frame to chair audit watchdog

Business

Jan du Plessis, the former chairman of BT Group and a host of other FTSE-100 companies, is a leading candidate to chair Britain’s audit watchdog as it prepares for a radical shift in its oversight of corporate Britain.

Sky News has learnt that Mr du Plessis, who stepped down as BT’s chairman this week after four years at the helm, is on a shortlist of contenders to become chairman of the Financial Reporting Council (FRC).

City sources said that the search for a new chair, which is being overseen by officials at the Department for Business, Energy and Industrial Strategy (BEIS), had narrowed in recent weeks, with an appointment expected to be made early in 2022.

Mr du Plessis is understood to be viewed in Whitehall as having excellent credentials for the FRC post, having chaired SABMiller, the brewing giant, British American Tobacco and Rio Tinto, the miner, as well as BT.

He has also served on FTSE-100 boards at Lloyds Banking Group and Marks & Spencer.

Whoever lands the role is highly likely to be the FRC’s final chairman, before it is abolished and replaced by a statutory regulator called the Audit, Reporting and Governance Authority (ARGA).

Kwasi Kwarteng, the business secretary, has spoken about audit reform being a priority for the government, although it emerged several weeks ago that a wider corporate governance overhaul that would make company directors more accountable for financial statements was likely to be scaled back.

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Government sources say their objective is to legislate and have ARGA operational by about the spring of 2023 – a timetable that would need to be adhered to if BEIS is to attract a chairman of Mr du Plessis’s standing.

As the body responsible for overseeing corporate governance standards in the boardrooms of Britain’s biggest companies, the FRC has been left embarrassed by its own leadership vacuum.

Simon Dingemans, its last chairman, decided to step down early last year after clashing with government officials over the extent of his outside business interests.

Since then, Keith Skeoch, former co-chief executive of the asset management group now called abrdn, has held the FRC chairmanship on an extended interim basis, but he too stepped down earlier this year.

Ironically, the extension of his tenure took Mr Skeoch beyond the nine-year stint on the FRC board that the regulator regards as a ceiling on the independence of directors on corporate boards.

Notwithstanding the problems recruiting new non-executive directors, the FRC is now regarded as having competent executive management in the form of Sir Jon Thompson, the former boss of HM Revenue and Customs.

While the body’s new chairman will not automatically become the inaugural chair of ARGA, it is overwhelmingly likely that a candidate like Mr du Plessis would lead the transition from the FRC.

The impetus for audit reform has been accelerated by a series of accounting scandals at major companies such as BHS, the department store chain, and Carillion, the construction group.

In recent years, the FRC has handed out tens of millions of pounds in fines to audit firms and professionals for failings in their work on the accounts of dozens of companies, including Patisserie Holdings and Autonomy, the software giant.

Ministers are due to publish their final views on the responses to a white paper on audit and corporate governance reforms in the coming months.

Among the measures expected to be adopted will be moves to break up the dominance of the big four audit firms – Deloitte, EY, KPMG and PricewaterhouseCoopers – by ensuring more business is handed to so-called challenger firms such as BDO and Mazars.

The groundwork for the FRC’s abolition was laid by Sir John Kingman, the former Treasury mandarin who now chairs Legal & General and Tesco Bank, who proposed that ARGA should have much tougher powers.

A separate report by Sir Donald Brydon, a former chairman of Royal Mail Group and London Stock Exchange Group, demanded sweeping cultural and practical reforms to the audit industry.

Both Sir John and Sir Donald have been critical of delays to the implementation of their recommendations.

BEIS was contacted for comment on Saturday, while Mr du Plessis declined to comment.

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