Directors of large public interest entities face enforcement action

17 May 2021

Plans to overhaul the definition of public interest entities under new audit reform proposals will introduce new enforcement powers which will net directors. Harvey Knight, partner in Withers' financial services regulatory team, examines the plans

On 18 March 2021 the government published the White Paper consultation, Restoring trust in audit and corporate governance, with its consultation period ending on 8 July 2021. Its aim is to reform audit regulation and the audit regulators in the wake of high profile corporate failures such as Carillion.

Company directors should also note that its aim is to reform corporate governance standards too. In particular, it includes new powers of enforcement against all directors of ‘large public interest entities’ (PIE) whenever there is a corporate failure.

So what is a PIE?

The consultation paper proposes two options: