"Increasing future regulatory burdens on Companies may not improve corporate responsibility or stakeholder protection", ACCA argues. The active engagement of regulated entities in their regulation is needed.
ACCA’s policy paper defends that the crisis in the banking sector occurred not because of a lack of regulation – the sector has in fact been subject to a very extensive rulebook – but because of the ineffectiveness of that regulation. Furthermore, the element of competition is key to effective regulation. The greater the size and complexity of a business, the more difficult it becomes not only to regulate but to manage.
Another key issue presented in the report is that the protection of depositors should be seen as the principal objective in the context of encouraging public confidence in the system. Regulatory authorities should take reasonable steps to ensure that regulated entities possess the skills and experience necessary for them to comply with regulatory requirements and protect the interests of their stakeholders. They should also adopt a systemic approach to the safeguarding of stakeholder interests, ensuring all relevant factors are addressed effectively.
Finally there is a need to implement a specific review of the role of non-executive directors, and in particular consideration of whether new measures could be taken to enhance their effectiveness in exercising supervision of the executives in large and complex institutions.
The full paper is attached below
© ACCA - Association of Chartered Certified Accountants
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