Dingemans Quits the Financial Reporting Council (FRC)


Simon Dingemans, the former finance chief for GlaxoSmithKline and long-term employee of Goldman Sachs, has surprisingly and abruptly quit his role as the Chairman of the Financial Reporting Council, less than a year after taking the helm. In this post we will look back at his tenure and find out why he has decided to move back into the private sector.

We analysed Dingemans’ appointment late last year here in Financial Regulation Matters, where we discussed his taking aim at the auditing oligopoly that the FRC has responsibility for regulating. At the time, Dingemans stated that ‘this is a rare opportunity to reform something so wholeheartedly’, and he made the break-up of the ‘Big Four’ and their oligopolistic hold on the auditing marketplace a priority. However, since his appointment it has been business as usual. The regulator has continued investigating members of the oligopoly, whilst also calling on members to upgrade their auditing tools. This is nothing out of the ordinary for the regulator. Yet, today’s announcement has come as a surprise for the regulator, and the market.

Dingemans, who came under pressure regarding the late filing of accounts he was a director of, had an arrangement with the FRC that he would be paid £150,000 to work a three-day part-time week, with Dingemans allowed to take on other roles as long as they did not conflict with his Chairmanship. It was announced by the FRC that the reason for his departure was because of him ‘being prevented from taking additional roles that may have conflicted with his duties at the FRC’. There has been no announcement as to what these roles may be, or where Dingemans will be going next. The FRC declared that the regulatory reform agenda is still on track – one that includes the breaking up of the Big Four – but time will tell. One element that will be of interest will be to see where Dingemans goes next, because there is an increased potential that this chain of events will be a fantastic example of the ‘revolving door’ that describes the consistent transition of regulators into industry, and vice-versa. The breaking up of the Big Four has been suspended because of the pandemic, and now it will be on the top of the agenda for the new Chair, if the FRC is true to its word. How the Big Four respond to this development will be of interest too, as they are already making moves to ‘break-up’ in principle, although this is questionable as the leading auditors have form in this area; in the aftermath of the Enron scandal a number of auditors split their auditing and consultancy services, only to restart a few years later once the media cycles had moved on to other areas of the financial system. What is for sure is that this development comes as a massive blow for the FRC, which at the same time fundamentally increases the pressure on the regulator as it seeks to protect its future as a regulatory entity.

Keywords – audit, FRC, regulation, @finregmatters

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