The FRC has released its annual report detailing the ways in which reform has shaped UK corporate governance and of how existing standards can be improved upon. The report is the first since the FRC’s eight regulatory bodies were united as one, the first to be formally presented to parliament, and the last under the Chairmanship of Baroness Hogg.

The organisation’s Chairman opened the report by writing: “Over the nine years I have been involved with the FRC we have made good progress developing and promoting high standards of corporate governance.”

The report primarily focused on forging alliances with regulatory bodies beyond UK shores, stating the importance of fostering cross border relations and pledging to “continue to lead the debates at European level on key issues including long terminism, audit tendering, non-audit services, IFRS endorsement and the company law action plan.”

The wider understanding of the UK’s regulatory requirements accounted for a sizeable share of the report. Chief Executive, Stephen Haddrill wrote that it was of paramount importance “the UK’s approach to corporate governance and reporting is properly understood and appreciated in the EU and internationally.

“Our focus on Europe will continue to grow as we seek to influence further the debates in Brussels in the run up to and beyond next year’s Parliamentary elections and change of Commission, especially on long-term finance, audit rotation and the importance of a Stewardship approach.”

Head of Communications at FRC, Peter Timberlake told Corporate Governance Report that: “The FRC’s internal reforms completed in 2012 brought many benefits including an increased focus on Brussels because of the importance of using our significant corporate governance experience to influence the development of governance and stewardship throughout Europe and across the globe.”

“We chair the European Corporate Governance Codes Network, an informal network that brings together the bodies responsible for national corporate governance codes in the European Union and European Economic Area countries.”

Despite the FRC’s stated intent to ensure “companies assess and report better on their strategies, business models and risks,” the organisation’s ambitious plans were dampened somewhat by their revealing £1.6m worth of overspending.

The report acknowledged that the past year had been marred, both financially and otherwise, by a number of high profile scandals, and attributed the extra costs to the gross complexity and frequency of disciplinary cases – accounting for £1.8m worth of over spending.

On protecting against future instances of scandal, the FRC spoke of the need to improve the culture of management in itself, “both in terms of business strategy and in holding to the spirit of the rules, such as in relation to LIBOR.”

Nonetheless, aside from the costs of disciplinary action, staff costs rose £0.8m on the previous year due to the additional staffing requirements of implementing the FRC’s reform programme and necessary IT support. However, Hogg maintained the heightened spending was beneficial, as “reform has enabled the FRC board to work more effectively with the market. The FRC has raised its game and created a greater focus on its primary task – trying to ensure that investors in the capital markets have what they need: effective boards; useful annual reports and accounts; easily comparable standards and good audit and actuarial standards.”

Despite a number of shortfalls, the rhetoric was generally positive, with Haddrill stating that: “We have a full and challenging agenda to anticipate and respond to developments in product and capital markets.”