Jim Sutcliffe, who joined the board of insurance outsourcer Quindell earlier this week, has decided to stand down from his position on the board of the Financial Reporting Council (FRC) and as chairman of its codes and standards committee with immediate effect, the regulator has announced
He will be replaced by Nick Land, former EY chairman and a director of the FRC, who will take over from Sutcliffe as the new chair of the code and standards committee. Land is also chair of the audit and risk committees at Vodafone Group and Alliance Boots. He is also the senior independent director for BBA Aviation plc and Ashmore Group plc. He retired as chairman of Ernst & Young LLP in 2006 after a career spanning 36 years with the firm.
Sutcliffe’s decision to be part of the new management team at Quindell as deputy chairman and strategy director alongside the new chairman Richard Rose, has attracted some critical comments since it was announced four days ago because of the decision to offer the two men and a third executive more than £25m in share options with terms and conditions which appeared to contravene the UK Corporate Governance Code, which is regulated by the FRC.
As a result of joining the company, Sutcliffe received options to 10.9m shares, and will be paid consultancy income by Quindell which has hired the services of BaxterBruce Ltd, a risk management consultancy where Sutcliffe is a director. Sutcliffe’s options are all exercisable within 12 months, whereas the code states that in normal circumstances options should not be exercisable in less than three years, and suggests a three to five year term.
In December it was announced that PwC is to carry out an independent review of accounting practices at Quindell, which has seen a sharp fall in its share price after the sudden departure in December 2014 of its founder and other members of the senior management team following criticism of a share deal.
Sutcliffe told Accountancy that 'I have greatly enjoyed my time on the board of the FRC and fully believe in the work they do to promote high quality corporate governance and reporting to foster investment.
'I am disappointed to be standing down at this time and continue to seek to uphold the highest principles of governance in all my public company roles whilst acting in the best interest of shareholders.'
Sir Win Bischoff, chairman of the FRC, said: ‘I wish to thank Jim Sutcliffe for his commitment and service to the board and his effective leadership of the codes and standards committee and before that the board for actuarial standards of the FRC.’
