HMRC loses chief to new audit watchdog as Leadsom means business

The chief executive of Her Majesty’s Revenue and Customs service has been confirmed as the person to lead the Financial Reporting Council into the refreshed entity the Audit, Reporting and Governance Authority.

Sir Jonathan Thompson, who has led HMRC for a little over three years, will take up the CEO post at the FRC in the autumn, following the departure of Stephen Haddrill.

Sir Jonathan said the chance to “promote public trust in
doing business in the UK, at a point when we’re about to forge new alliances
across the world” was “too exciting to turn down”.

In the last year, Sir Jonathan oversaw HMRC collect more
money than ever to pay for the UK’s public services. A record £627.9bn in total
revenue was collected, representing a 3.6% increase on the previous year.

At ARGA, Sir Jonathan’s role will be to restore faith in the
actions of audit and accounting firms whose reputations have been tarnished
thanks to several high-profile corporate failures.

These incidents were noted and punished by the FRC, but did
not halt the claims by some around the effectiveness of the regulator. The FRC
subsequently underwent the independent Kingman Review, the result of which was
its eventual transformation into ARGA.

ARGA is set to have a new mandate and stronger powers set
down in law when it comes into being in the autumn.

Within this new role, Sir Jonathan will be reporting to the newly appointed Business Secretary Andrea Leadsom, former Leader of the House of Commons and corporate governance leader at Invesco Asset Management. Ms Leadsom, who had retreated to the back benches after resigning the position earlier in the year, was slotted into the role by the newly appointed Prime Minister Boris Johnson this week.

In a video to accompany her arrival at the Department for
Business, Energy and Industrial Strategy, Ms Leadsom highlighted the need to
support UK business after Brexit.

She also said: “…and of course
also tackling the vital issue of global climate change and I really
look forward to getting stuck into the work.”

In this role, Ms Leadsom will be responsible for
the UK’s decarbonisation strategy. A previous environment minister, she has
been criticised for supporting fracking, but more recently has talked of a
“climate emergency” and how the UK could help stabilise changes to the
environment.

Ms Leadsom will also be in charge of overseeing
the continuing implementation of the second Shareholder Rights Directive –
issued by the European Union – that will impact how asset owners can access and
act upon information published by portfolio companies.