Judges do not need to be experts in the subject they rule upon

Your assumptions are wrong

As is your analysis of my argument

Richard

Also, very politely….

I am not making an argument of my own. I am merely drawing out the assumptions in your argument.

If I was going to make an argument about the composition of the FRC’s Board I would start with relevant expertise and then worry about independence of judgement. But I suspect that we would disagree about the former as much as the latter.

Regards
Mark

Very politely, your argument is absurd. I suspect you know it.

I do not for one minute suggest that any person is entirely objective - I do not believe that possible. But it is a well established fact that as far as is possible those undertaking a regulatory or supervisory role should both be as objective as it is possible to be, and as importantly, be seen to be so.

This is why, for example, auditors must have no interests in the companies they audit. It doesn’t prove a lack of bias, but it helps.

The greater the remove a person has from the matter subject to review the greater the prospect they will be objective. This is a well established principle.

The FRC has ignored it. All the poeople it has appointed are compromised by being officials in the very companies being regulated. On this basis we might as well have the directors issue the audit report on their companies. That’s how objective we can expect these people to be.

Respectfully, unlike your argument, this is both plausible and accords with accepted practice for regulation.

Richard

So let me get this right. In your opinino:

1) All employees of for-profit companies have conflicts of interests because their principal loyalty is to their employer.

2) Many academics have conflicts of interest, but not all; some have managed to avoid this problem. Presumably they are either only semi-loyal or their employer has no interests.

3) Many accountants who work for not-for-profit companies do not have conflicts of intererst. Either they have no loyalties at all, or their employers have no interests at all.

Not a very plausible or consistent account of individual or institutional interests, I’m afraid.

Regards
Mark

You’re right

Many academics are conflicted

I suggested one who has shown himself not to be

There are also many accountants working for charities who would not be conflicted either

Richard

If you are going to be wholly reductive about the interests and behaviour of individuals employed by City firms then you should apply the same logic to academics, who are also salaried employees of large institutions to whom, presumably they owe some loyalty.

The idea that academics have no conflicts of interest strikes me as wholly implausible.

Mark

I’m always bemused by the idea that those who work in the City as hired agents of pension funds are ‘invetsors’ when they are very often working for the smae people who are the vendors of pension and other financial products.

They are not the investors. Their loyalty is to their employer. That is where their reward comes from.

Investors are those who actually own the money, or at the very least the independent trustees who run these funds for them - but not their hired agents.

What is needed is a person of proven ability and independent mind to speak on behalf of these people. Like Prof prem Sikka, for example. He has no conflicts of interest.

Richard

Well L&G Investment Management and Barclays Global Investors are the two largest managers of pension fund money in the UK. So the pension fund community is represented, by the two leading institutions to whom they outsource their management.

You’re right.

I was fighting them on IFRS 8 at the time.

Their conduct on that issue was, in my opinion, profoundly unethical. It provided me with few grounds for optimism, or belief that I would be heard.

Richard