It was a person, a very large person, six foot seven inches tall and big with it. He was Paul Volcker, the Chairman of the Trustees. Volcker had been Chairman of the Federal Reserve in the US and was then, as now as President Obama showed, a go-to person if heavy-lifting was required somewhere in the financial and business world. Tweedie used to refer to him as "a superb second-row", a reference to a key man in the scrum in a game of rugby who provides the shove which would deter, then overpower, and finally defeat the opposition.
But as time went on and the work of the IASB extended across Europe, then out across the rest of the world, and even into the heartland of US corporate life the need for a rather more sophisticated, urbane, but still effective governance system became necessary. It needed the strength to protect the Board's independence. But it needed to show real accountability acceptable to all.
This is always difficult. The perennial problem of who regulates the regulators has echoed down the centuries. The US standard-setter, FASB, had a set of trustees who reported upwards to the nation's senior regulator, the SEC, whose Chairman was appointed by the President. The IASB had set up a similar Board of Trustees, but it had not been obvious who these people should report to, if anyone. But, post-2005 when all listed companies in Europe had to follow international financial reporting standards, the IASB was effectively setting the law. Accountability through a simple statement of independence backed by the trustees was no longer enough to satisfy both opponents and supporters.
So the long and sometimes drawn-out process of creating an effective further tier began. And last year the Monitoring Board, drawn from and accountable to the world's great public regulatory bodies, the SEC, the European Commission, the global stock market organisation, IOSCO, and the Financial Services Agency of Japan, with the Basel Committee on Banking Supervision as an observer, took its place at the top of the accountability pyramid.
And once in place it decided that it needed a full review of whether the current governance structure worked. And, more or less at the same time, the Board of Trustees decided that, with the end of the IASB's first decade coming into sight next June, it should also take a look as how the whole system worked. We are now in the midst of an unprecedented bout of discussions and consultations aimed at reinforcing the governance system. And, as with any effort at throwing everything up in the air and seeing how it looks when it lands, all manner of hares are starting to run.
This is a good thing. The credibility of any organisation depends on its transparency and its perceived openness to change. But there is also an inherent danger. Old arguments, previously rebuffed and dismissed, can gain traction again. No one doubts the need for independence. At the most recent meeting of the Monitoring Board, in New York at the end of October, the European Commission's Commissioner for Internal Market and Services, the powerful Michel Barnier, went out of his way to say that any discussion of governance "should not undermine the Board's independence", and then, to underline his point, followed that with: "Never". But the points of friction which emerged so sharply at the height of the financial crisis are there for fighting over once more. Are financial reporting standards and the process which creates them there for the benefit of capital market investors? Or are they there to provide a balance between capital markets and prudential financial stability concerns which regulators strive for? Should the members of the Monitoring Board be endorsers or enforcers? This could be an interesting argument in the future. The man who takes over as Chairman of the IASB when Tweedie steps down at the end of June next year, Hans Hoogervorst, was Chairman of the Financial Crisis Advisory Group and in both its report on the standard-setting response to the financial crisis and in Hoogervorst's public pronouncements it is obvious on which side of the line he sees himself. "Accounting rules cannot make stable what is inherently unstable", is a favourite line. Even the Governor of the Bank of England appeared to weigh in to this argument recently when he declared it to be "very silly" to assume that all risks and challenges could be encompassed by one magic number.
But the two processes of re-assessing the role of both the Monitoring Board and Trustees run wider than that. They encompass the nature of quite what public interest the IASB is acting in. They look at the primary role of financial reporting. They look at how you balance independence with accountability. And they puzzle about where the finance should come from. And above all they are looking to see if the intensity of standard-setting can be lowered and more time devoted to how effective standards are and the benefits they provide. An organisation which devotes much time to measurement needs to probably conduct itself in a more measured way.
The products of all this debate are supposed to emerge in the earlier part of next year. They should provide more indications of precisely where the IASB, and its governance bodies, are moving. But as its first, hugely successful, decade moves to a close there is still everything to play for.