The EU Regulation on the continued of financing of the IFRS Foundation and PIOB for the period 2014-2020 and of EFRAG for the period 2014-2016 had stipulated that the Commission shall submit annual reports to the European Parliament and to the Council on necessary governance reforms in the area of accounting and financial information in respect of EFRAG, taking into account, inter alia, the developments following the recommendations set out in the the Maystadt report and on the steps that EFRAG has taken to implement those reforms. The Commission has now published its first report.

In its report the Commission notes that the revised EFRAG Statutes and EFRAG Internal Rules reflect recommendations regarding the following issues included in the Maystadt report:

• Extension of membership of the General Assembly to include National Funding Mechanisms and other private or public organisations.
• Criteria, commitments and rights for membership of the General Assembly.
• A minimum of two year financial commitment for members of the General Assembly.
• Voting rights in the General Assembly, inspired by the notion that no single organisation should be able to block the operations of EFRAG.
• Tasks of the General Assembly.
• Nominating Committee with an advisory role on certain aspects of the nomination and selection process.
• Profile and criteria of the Board.
• Role of the President of the Board.
• Responsibilities of the Board.
• Fallback procedures for the Board for cases where no consensus can be reached.
• Responsibilities of EFRAG TEG.
• Profile and criteria for the membership of EFRAG TEG.

The Commission recognizes that in many cases the level of detail of these amendments goes beyond the recommendations provided in the Maystadt report. However, the Commission also notes that there were departures from the recommendations in the Maystadt report. These concern the composition of the new Board (necessitated by the fact that the European Supervisory Authorities and the European Central Bank declined to accept full membership of the Board), decision-making in the Board with a fall-back solution introduced for cases where no consensus can be reached, and combining the functions of CEO of EFRAG and Chairman of EFRAG TEG (a suggested requirement of Mr Maystadt's report that was turned into a possibility).

Overall, the Commission comes to a favourable conclusion regarding the progress made:

On the basis of the above, it can be concluded that overall EFRAG has made promising progress in implementing the reforms following the key recommendations of the Maystadt report. [...] The Commission will continue to closely monitor the implementation of the reform of EFRAG and will duly report on that to the European Parliament and the Council.

Please click for access to the full report on the European Commission's website.