A review of the Financial Conduct Authority’s board has heaped praise on outgoing chair Charles Randell, as campaigners continue to call for his successor to have a closer eye on the victims of regulatory failure.
Randell said last month he would be leaving his post, a surprise move that will see him exit the regulator a year ahead of schedule in Spring 2022.
A successor for the former Slaughter and May lawyer and key Treasury adviser during the financial crisis has yet to be announced.
Ahead of his departure, the FCA has published an independent review of its board’s effectiveness by consultancy Advanced Boardroom Excellence.
The findings sound a positive note on Randell’s role in helping chief executive Nikhil Rathi push through an ambitious transformation project — which has included a number of changes to the makeup of the board — since Rathi took over last November.
“There is widespread acknowledgement of the huge burden the chair has shouldered whilst the building blocks for this board and executive were put in place,” the review finds. “The chair’s skill, intellect and capability, along with his ability to engage positively with key stakeholders, was also a key positive feature in this review. There is a recognition that [non-executive directors] can now do more to share the workload of things that need to be done.”
While the regulator has been widely criticised for failing to prevent crises including the collapse of the Woodford fund empire and the demise of mini-bond provider London Capital and Finance, which left retail investors millions of pounds out of pocket, Randell and the rest of the top team at the FCA have shown “a significant amount of endeavour and hard work” to put the watchdog on a “more positive basis for the future,” the reviewers write.
“The chair has increasingly taken a pro-active approach to developing the whole board as a coherent collective group to continue focus on the key issues,” while Randell and Rathi are taking on an “increasingly strategic perspective and oversight of the organisation,” according to the review.
The report comes as campaign group the Transparency Task Force has written an open letter to Treasury economic secretary John Glen calling for consumer rights advocates to have a say in who gets appointed as the next chair of the FCA.
Having appealed to the chancellor in October not to give the role to “another conflicted City insider”, the group has now said that at least half of the assessment panel’s membership “should champion consumer, rather than producer interests”.
The group has provided a list of potential candidates for the panel, including City asset manager Gina Miller, co-founder of the True & Fair Campaign, and Margaret Snowdon OBE, chair of the Pension Scams Industry Group.
“We believe that the named individuals would genuinely seek to appoint a chair who would engender support from the victims of the FCA’s many regulatory failures,” the letter from the Transparency Task Force reads.
Staff within the FCA itself have also been demanding a shift in tone from the top in recent months. Rathi’s plans for change involve an overhaul to pay and perks at the regulator, including a shift from a model where the “vast majority” of staff were awarded discretionary bonuses without having to demonstrate exceptional performance, to one where performance rankings and regional weightings usher in a competitive package for top talent.
While the move will increase base salaries for some of the lowest paid at the watchdog, and ensure uplifts every year for leading staff, internal meetings about the proposals have generated heated feedback over how the board is handling its consultation, Financial News reported in October.
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