Senior business leaders and corporate governance experts have expressed “profound disappointment” at the Government’s decision to drop the Audit Reform and Corporate Governance Bill.

The open letter, coordinated by the Chartered Institute of Internal Auditors, was sent to the Secretary of State for Business and Trade today, with signatories including the Institute of Directors, leading academics and senior non-executives from major UK companies.

Eight years on from Carillion, and despite repeated commitments including in the King’s Speech, no audit reform legislation has been delivered, the group warned. They argue this leaves the UK exposed to further avoidable corporate collapses and are urging the Government to publish modernised corporate reporting proposals, prioritising a strengthened statutory audit regulator, without delay.

“We are writing to express our profound disappointment at the Government’s decision not to proceed with an Audit Reform and Corporate Governance Bill,” the letter read. “This represents a significant step backwards, particularly after the commitment made in the King’s Speech to publish a draft Bill. After years of delay, this latest announcement is extremely concerning.”

The letter notes that eight years after Carillion, other major failures have occurred, including those at Bulb, ISG, Patisserie Valerie, Thomas Cook and Wilko. These collapses, the signatories say, have cost tens of thousands of jobs, damaged pensions and harmed small businesses across supply chains.

“If the Government is serious about driving growth and delivering economic stability, it must act to prevent further avoidable failures through stronger oversight of our largest companies,” the letter continued.

The letter also calls for publication of a modernised corporate reporting framework and for the statutory audit regulator to be a priority, ensuring the Financial Reporting Council has the powers to operate effectively.

Joining the Chartered IIA’s chief executive Anne Kiem as signatories to the letter were Jonathan Geldart, director-general of the Institute of Directors; Catherine Howarth, chief executive of ShareAction; Chris Turner, chief executive of B Lab UK and campaign director of the Better Business Act; Charles Henderson, chairman of the UK Shareholders Association; and academics and non-executive directors including Prof Andrew Chambers, Byron Grote and Prof Mike Power.

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