However, both organisations have denied that there is anything out of the ordinary in the situation.
As a BEIS spokesperson said, “This is no conflict of interest. The position covers all organisations connected to BEIS and a formal declaration of interest has been completed in line with our policies.”
Kate Marshall has been a deputy director in BEIS’s partnerships team for just over a year, with a brief to ensure robust arrangements for governance and accountability among more than 50 “arm’s length bodies”, including the FRC.
Since her promotion to the BEIS team, the FRC has had its status as a non-departmental public body confirmed and it is now negotiating its future modus operandi with BEIS.
As part of her job, Marshall is also responsible for ministerial appointments. These already include the posts of FRC chair and deputy chair but the number is likely to expand to members of the board and to the executive team – including the chief executive role – once BEIS has agreed the way forward.
Marshall’s interest in accounting and auditing dates back to 2003 when she acted as lead negotiator on the Eighth Audit and Accounting Directive, linking to the Fourth and Seventh Company Law Directives within the department (then known as the Department of Trade and Industry). It was here that she met Haddrill, a fellow civil servant.
In a statement, the FRC stressed, “Stephen Haddrill's marriage to Kate Marshall has always been disclosed to the FRC. No conflicts of interest have arisen.”
Yet the disclosure has taken many members of the profession aback. They highlight the fact that BEIS and the FRC hold them to the highest standards yet appear not to have kept their own houses in order. “This is not an arm’s length relationship,” said one commentator. "At the very least, BEIS should have picked someone else to manage the FRC relationship."
The revelation has rather eclipsed the rationale behind publication of the register – which was to show the regulator’s independence from the profession by providing information on the interests of members of the FRC board and main committees.
As FRC chair Sir Win Bischoff explained in September, the FRC’s decision to end the investigation into KPMG’s audit of HBOS had been questioned by media and politicians, and attracted questions about the FRC’s independence.
“It is vital that these decisions are taken based on the available evidence rather than on political considerations or public clamour,” he said.
“Publishing our policy and our register of interests should further remove doubt about the objectivity of our decisions.”
The register shows that the number of members who have pensions tied up with the UK’s largest accountancy firms is lower than some commentators have suggested – 12 out of 44 names – which should go some way towards rebutting the idea that the Big Four firms are able to exert undue influence over the regulator.
As far as the 15-strong FRC board is concerned, only five members have interests in Big Four pension schemes. According to the register, Melanie McLaren, the FRC’s executive director, audit and actuarial regulation, is entitled to a PwC pension that she will receive between the ages of 55 and 60, although she says that this is “not material to her income or assets”. She spent 24 years at the Big Four firm, the last 10 as a partner.
Her undergraduate son, she reveals, is currently on a one-year placement with EY, but not in the firm’s audit practice.
Fellow board member and non-executive director Mark Armour, a former PwC partner, reveals that he has an interest in two different PwC pension funds stemming from his 19 years at the firm. The register also notes that his PwC partner annuity is subject to a "charge and trust arrangement", which was undertaken to remove any residual financial relationship with the firm.
Non-executive director Roger Marshall is also a member of a PwC scheme.
Paul George, the FRC’s executive director, corporate governance and reporting, is a member of KPMG’s pension scheme, while non-executive director Nick Land was a member of the EY staff pension scheme until 2014.
FRC committee members with interests in audit firm pension schemes include Liz Murrall (EY and Deloitte), Sean Collins (KPMG), John Hitchins (PwC), Geraint Davies (Grant Thornton), Richard Murray (EY) and Andrew Vials (KPMG).
Stephen Mount, who is a member of the audit quality review team and who stood down as a PwC partner in June 2016, discloses that he receives an annuity “which is a determined prior charge on partnership profit and expires in 2028”.
Of the 44, 18 are ICAEW members, one is a CIMA member, and two are ICAS members. Former ICAEW president Paul Druckman is also an honorary member of ACCA.
The FRC has also issued a “governance bible” which sets out the structure and responsibilities of its boards and committees.