Deloitte UK announces audit governance changes and new managing partner has been saved
Deloitte UK announces audit governance changes and new managing partner
11 September 2020
- New Audit Governance Board, effective from 1 January 2021, will be part of early adoption of the FRC’s principles of operational separation
- Baroness Ford appointed as chair, with Jim Coyle, Almira Delibegovic-Broome QC and Shirley Garrood as independent non-executives
- Stephen Griggs to become UK managing partner, working alongside UK CEO Richard Houston
- Colleague Advisory Forum to be formed in line with Corporate Governance Code
Deloitte today announces changes to its audit governance structure, with the establishment of an independent Audit Governance Board (AGB)*. Margaret, Baroness Ford of Cunninghame OBE, will be appointed as independent non-executive chair of the AGB when it is established, which will have a majority of independent non-executive directors, including Jim Coyle, Almira Delibegovic-Broome QC and Shirley Garrood, in addition to Baroness Ford.
Effective from 1 January 2021, the AGB will have responsibility for providing independent oversight of the UK audit practice, with a focus on the policies and procedures for improving audit quality and ensuring the Financial Reporting Council’s (FRC) objectives of, and desired outcomes for, operational separation are met.
The creation of the AGB is the initial phase of Deloitte’s implementation of the principles for operational separation set out by the FRC in July 2020.
Richard Houston, senior partner and chief executive of Deloitte UK, said: “We recognise the need to be more transparent about our audit business and demonstrate that audit quality remains our number one priority. Our governance changes are an important part of this, and we welcome the diverse and extensive experience and independent rigour these high calibre individuals will bring to the AGB and our audit business.
“The AGB is central to Deloitte’s new governance framework and a key step in the operational separation of our audit business from our wider firm. We continue liaising with the FRC on the best ways to implement further changes to our governance and reporting structures.”
Baroness Ford, incoming chair of Deloitte’s AGB, commented: “I am delighted to be joining Deloitte, one of the UK’s leading professional services firms, at what is a crucial time for the sector. It is clear that Deloitte recognises, and takes very seriously, its obligations around transparency, strong governance and the public interest, and I look forward to bringing my experience and insight to the firm.”
Stephen Griggs, current Deputy CEO and managing partner for audit & assurance and public policy at Deloitte UK, said: “We’ve been consistent in our support for audit reform, and remain committed to playing our role in delivering change that embraces audit quality, improves choice and restores trust.
“However, while governance changes to audit businesses are a key element of audit reform, they must also be considered alongside a wider package of change, including in areas such as corporate reporting, the role of directors, the evolution of the audit product and the regulatory environment in which we operate. Sweeping reform is needed if we are to better meet society’s needs and expectations of the audit profession in the years ahead.”
Alongside the establishment of the AGB and the independent non-executive appointments, Deloitte has also announced that Stephen Griggs will become managing partner for Deloitte UK.
Richard Houston added: “I am delighted to announce Stephen in this role, where he will be responsible for business performance, operations and public policy for Deloitte UK. We will work closely together as I remain the UK chief executive – with Stephen leading on all operational matters which, importantly, will include overseeing operational separation as part of audit market reforms. A successor for Stephen’s role as managing partner for audit & assurance will be in place by 1 October 2020.”
Finally, Deloitte will also establish a new Colleague Advisory Forum, in line with the Corporate Governance Code, to support engagement on governance. Made up of colleagues from a range of grades and parts of Deloitte, it will provide a more diverse perspective to the AGB and the firm’s UK Oversight Board (UKOB)*, to help inform decision-making.
Note to editors
Independent non-executives’ backgrounds
Margaret, Baroness Ford of Cunninghame OBE, has over 25 years’ experience as a non-executive director and chair of private, listed companies and government bodies. She currently chairs STV plc and NewRiver REIT plc. She is a senior adviser to the Lendlease Corporation and chairs the Challenge Board of the building renewal programme at Buckingham Palace. She is also a Trustee of the British Olympic Association, National President of Epilepsy Action and Chair of the STV Children’s Appeal. Previous corporate experience included chairing Grainger plc, May Gurney Integrated Service plc, and Barchester Healthcare Ltd. In the public sector she chaired English Partnerships (now Homes England) and the Olympic Park Legacy Company. She sits as a crossbench peer but is currently on a leave of absence from the House of Lords. She joined Deloitte’s UKOB and the North and South Europe Board in 2020.
Jim Coyle, after 25 years in financial services, retired as Group Financial Controller/Deputy Finance Director at Lloyds Banking Group in May 2015. Prior to that he held the position of Divisional Finance Director, Group Operations as well as Group Chief Accountant at the Bank of Scotland. Before joining Lloyds, Jim held senior finance positions at BP for ten years. He is currently on the Board of HSBC UK Bank plc – for which he is also the Chair of the Audit Committee – as well as Marks & Spencer Financial Services plc. He is also Chair of the Audit & Risk committees at Honeycomb Investment Trust Plc and Scottish Water. Jim holds a degree in Law and Accountancy from Glasgow University and qualified as a chartered accountant with KPMG. Jim joined Deloitte’s UKOB as deputy chair in January 2019.
Almira Delibegovic-Broome QC is a senior member of the Bar in Scotland, specialising in company and insolvency law. Almira is also a member of the Business Committee of the General Council of the University of Edinburgh and a non-executive member of the Advisory Board for the Accountant in Bankruptcy. Her previous experience includes time as a Visiting Scholar at Harvard Law School and as a Senior Research Fellow for the Committee on Capital Markets Regulation in the US. Almira joined Deloitte’s UKOB in March 2020.
Shirley Garrood was Chief Financial Officer of Henderson Group plc from 2009-2013 and then Senior Independent Director, Deputy Chair and Chair of the Audit Committee at esure Group plc until 2019. She is currently Senior Independent Director and Chair of the Risk Committee at Hargreaves Lansdown plc and Chair of the Audit and Risk Committee at the BBC. As well as working in financial roles, Shirley was previously Chief Operating Officer at Henderson Group plc and at Morley Fund Management (part of Aviva). She also served as a governor of the Peabody Trust housing association. She graduated in Economics and Accounting from the University of Bristol and is a qualified Chartered Accountant and Corporate Treasurer. She joined Deloitte’s UKOB in May 2020, providing oversight of the external audit business only. In accordance with FRC principles for operational separation, Shirley will now sit on Deloitte’s AGB and will step down from the UKOB.
* Deloitte has had a UK Oversight Board (UKOB) in place since 2017, which will now sit alongside the AGB and oversee non-audit related and certain firm-wide matters for the UK Practice of Deloitte. The AGB will have responsibility for providing independent oversight of the firm’s UK audit business, with a focus on the policies and procedures for improving audit quality. This includes ensuring that people in the audit business are focused, above all, on the delivery of high-quality audits in the public interest, and oversight over the policies and processes for ensuring that audit partner remuneration reflects their contribution to audit quality appropriately.
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