The move would also see the regulator’s remit extended to cover all directors’ financial reporting breaches.

The regulator wants to see a ‘reinvigorated’ approach to company reporting, which it says needs to be more effective, with greater emphasis from directors on a range of factors including the  long-term consequences, the environment, employees, suppliers and customers. The FRC wants these factors included within the strategic report regulations.

The FRC wants the role and remit of the remuneration committee to be extended to cover pay policies throughout the organisation. It argues that remuneration policy and payments should have a much clearer link to delivery of strategy, focusing strategy and outcomes which deliver long-term company performance.

It says a ‘significant’ minority vote against remuneration reports should trigger further consultation and in certain circumstances, a second vote that would be binding.

The FRC supports the introduction of corporate governance principles for large private companies and associated reporting, and says it is ‘well placed’ to develop this.

In addition, the FRC proposes extending its powers to investigate and prosecute all directors for financial reporting breaches and associated issues of integrity, rather than only accountants and actuaries.

Last week the FRC announced plans for a fundamental review of the UK corporate governance code, which it says will take account of the issues raised in the green paper and the BEIS select committee inquiry.

The FRC response to the green paper on corporate governance reform is here.