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IASCF Constitution Review 2008

November 2007: IASCF Trustees announce strategy to enhance governance

On 7 November 2007, the Trustees of the International Accounting Standards Committee Foundation (IASCF), the oversight body of the IASB, announced proposals to enhance the organisation's governance arrangements and reinforce the organisation's public accountability. The Trustees will begin a series of consultations with key stakeholders on these proposals in the build up to the Constitution Review, which is scheduled to start in 2008. Click for IASCF News Release (PDF 55k).

IASCF Governance Proposals
  • Establish a formal reporting link to official organisations: The Trustees should establish a link to a representative group of official organisations, including securities regulators. This body would approve Trustee appointments and review Trustee oversight activities, including the adequacy of the annual funding arrangements as well as the overall budget.
  • Develop a multi-layered, multi-faceted approach to accountability beyond the formal link to official organisations: The Trustees should intensify and deepen their engagement with key stakeholder groups and develop mechanisms for the Trustees to receive input outside formalised procedures. This would necessarily include mechanisms for meeting with official organisations and policymakers and private sector institutions. Furthermore, such accountability would require consideration of the role and structure of the Standards Advisory Council in the organisation's accountability.
  • Create a mechanism for public input to the Trustees outside regularly scheduled meetings with specific stakeholder groups: The Trustees should establish enhanced mechanisms for input from interested parties who wish to comment on the IASC Foundation's and the IASB's policies, processes, and procedures.
  • Continue efforts towards a sustained, broad-based funding regime: Having already significantly broadened the funding base through the new approach adopted in 2006, the Trustees should continue their work to broaden the funding base further.

November 2007: Proposed new body to monitor the IASCF and IASB
On 7 november 2007, the European Commission, the Financial Services Agency of Japan, the International Organization of Securities Commissions (IOSCO), and the US Securities and Exchange Commission jointly proposed the creation of a new monitoring body within the governance structure of the IASC Foundation. This body would meet regularly with the IASCF Trustees to:

  • Review and comment on the IASB's work programme.
  • Participate in – and have final approval in the selection of – IASCF Trustees.
  • Review the Trustees' oversight activities.
Click to download the Joint Statement (PDF 72k). An excerpt:

Excerpt from the Joint IOSCO, EC, SEC, and FSAJ Statement

The IASB, which is overseen by the IASC Foundation Trustees, is an independent standard setter committed to developing, in the public interest, a single set of high quality, understandable, and enforceable global accounting standards. The IASC Foundation Trustees have scheduled a review of the Foundation's Constitution to begin in 2008. The authorities responsible for capital market regulation propose to utilize the opportunity of the Constitution Review to put forward, in collaboration with the IASC Foundation, certain changes to strengthen the Foundation's governance framework, while emphasizing the continued importance of an independent standard-setting process.

Central to this effort is the establishment of a new monitoring body within the governance structure of the IASC Foundation to reinforce the existing public interest oversight function of the IASC Foundation Trustees. The creation of such a monitoring body would serve to complement the Trustees in its representation of the interest of the global investor community, thereby enhancing public confidence in IFRS.

One key objective is to have the monitoring body meet regularly with IASC Foundation Trustees to discuss, review and comment on the IASB's work program. We expect the IASC Foundation and IASB Chairmen will also engage with relevant public authorities. The monitoring body would, together with the IASC Foundation Trustees and in consultation with the trustee appointments advisory group, participate in the selection of Trustees. The monitoring body would also be responsible for the final approval of Trustee nominees and would have the opportunity to review the Trustees' procedures for overseeing the standard-setting process and ensuring the IASB's proper funding.

February 2008: IASCF proposals for a monitoring group, enlarged IASB

In November 2007, the Trustees of the IASC Foundation (IASCF), under which the IASB operates, announced proposals to enhance the organisation's governance arrangements and reinforce the organisation's public accountability (see Above). Those proposals included creation of a 'monitoring group' of representatives of official organisations, including securities regulators, that would approve Trustee appointments and review Trustee oversight activities, including the adequacy of the annual funding arrangements as well as the overall budget. Subsequently, the trustees began a series of consultations with key stakeholders on those proposals in the build up to the Constitution Review, which is scheduled to start later this year. At their meeting on 29-30 January 2008, the Trustees reached the following further conclusions regarding the Constitution Review (click for Press Release (PDF 67k):

  • An accelerated consideration of a monitoring group: The Trustees will accelerate consideration of their proposals on the size, composition and mandate of a monitoring group with the goal of reaching conclusions in the second half of 2008. Initial proposals will be published for comment in the second quarter of 2008.
  • A proposal to expand the IASB to 16 members: At the same time, the Trustees will propose a gradual expansion of the IASB to 16 members. While maintaining the existing Constitutional criteria for selecting members of the IASB, the Trustees will consider whether the Constitution should also explicitly ensure a minimum geographical balance.
  • An extended consultation process on other Constitutional matters: The Trustees intend to publish in the first half of 2008 a discussion document inviting comments and suggestions on other elements of the Constitution. The Trustees will attempt to conclude the broader review of the Constitution by the end of 2009.
The Trustees plan to broaden their discussions with stakeholder groups on both the specific proposals above and on the review of the Constitution more generally.

February 2008: Fast-track for proposed IASCF monitoring group, enlarged IASB

At a meeting of the Standards Advisory Council on 14 February 2008, IASCF Trustee Antonio Vegezzi and IASCF Director of Operations Thomas Seidenstein reported that the Trustees intend to fast-track their consideration of two issues:

  • Creation of a 'monitoring group' of representatives of official organisations, including securities regulators, that would approve Trustee appointments and review Trustee oversight activities
  • Expansion of the IASB to 16 members from the present 14.
Accordingly, they expect to publish formal proposals for public comment some time during the second quarter of 2008. They also reported that the remainder of the Constitution Review will get under way in third quarter 2008 and is expected to take about two years.

April 2008: IASC Foundation launches 2008 Constitution Review

On 8 April 2008, the Trustees of the International Accounting Standards Committee Foundation, under which the IASB operates, announced the process for the 2008 Constitution Review. They also completed proposals, to be published shortly, to:

  • Create a 'monitoring group' of representatives of official organisations, including securities regulators, that would approve Trustee appointments and review Trustee oversight activities
  • Expand the IASB to 16 members from the present 14, and provide for geographical balance
The remaining issues will be dealt comprehensively beginning with a consultation document in the second half of 2008. The Trustees expect to complete the review by the end of 2009. The Trustees have formed a Constitution Committee to guide the review, though decisions rest with the Trustees as a whole. That committee includes: Gerrit Zalm, Chairman of the Trustees; Philip Laskawy, Vice Chairman of the Trustees; Bertrand Collomb; Samuel DiPiazza; Aki Fujinuma; Pedro Malan; and Antonio Vegezzi. Click for Press Release (PDF 63k).

Timeline for the 2008 Constitution Review
April 2008Publication of proposals concerning public accountability and IASB size/geographical diversity – the first track of the Constitutional Review. Comment period to end on 31 July.
April-August 2008Trustees to meet interested parties to discuss proposals on the first track
September 2008Constitution Committee to develop proposals to present to full Trustees, based upon analysis of comment letters and other input on the first track proposals.
October 2008Trustees to conclude the first track of Constitution Review at their Beijing meeting. Changes to take effect for 1 January 2009.
October or November 2008Trustees to publish a discussion document inviting views on other issues to be incorporated as part of the Constitutional Review – the second track of the Constitution Review.
October 2008-January 2009Trustees to meet interested parties to discuss the second track of the Constitution Review.
February 2009Trustees to develop list of issues and the Constitution Committee to develop proposals.
April 2009Trustees to publish other constitutional proposals on issues identified.
April 2009-October 2009Trustees to hold a series of meetings on proposals, possibly including public round-table discussions.
October-November 2009Conclusion of the Constitutional Review.

May 2008: IASCF Trustees will hold round-table on constitution proposals

On 12 May 2008, the IASC Foundation Trustees Announced (PDF 55k) that they are going to hold a public round-table discussion in advance of issuing their proposals on Phase 1 of the IASCF 2008 Constitution Review. Phase 1 is addressing whether to:

  • Create a 'monitoring group' of representatives of official organisations, including securities regulators, that would approve Trustee appointments and review Trustee oversight activities
  • Expand the IASB to 16 members from the present 14, and provide for geographical balance
Details of the public round-table have not yet been announced. In announcing the round-table, the Trustees released an updated timeline for the Constitution Review (the previous timeline is immediately above):

Updated Timeline for the 2008 Constitution Review
March-April 2008Trustees developed proposals and document for the Constitutional Review.
May-June 2008Trustees to meet interested parties to discuss proposals before publication of document on the first part.
June 2008Publication of proposals on public accountability and IASB size/geographical diversity – the first part of the Constitution Review. Comment period to end in August or September 2008.
June 2008-August 2008Trustees to continue to meet interested parties to discuss proposals on the first part.
September 2008Constitution Committee to develop proposals to present to full Trustees, based upon analysis of comment letters and other input on the proposals in the first part.
October 2008Trustees to conclude the first part of the Constitution Review at Beijing meeting. Changes to take effect for 1 January 2009.
October or November 2008Trustees to publish a discussion document seeking views on other issues to be incorporated as part of the Constitution Review – the second part of the Constitution Review.
October 2008-January 2009Trustees to meet interested parties to discuss the second part of the Constitution Review.
February 2009Trustees to develop list of issues and the Constitution Committee to develop proposals.
April 2009Trustees to publish other constitutional proposals on issues identified.
April 2009-October 2009Trustees to hold a series of meetings, possibly including public round tables, on proposals.
October-November 2009Conclusion of the Constitution Review.

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