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FASB trustees approve major structural changes

  • FASB (old) Image

27 Feb 2008

The Board of Trustees of the Financial Accounting Foundation (FAF) has voted to approve major changes to the oversight, structure, and operations of the FAF and its two standard-setting Boards, the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB).

The changes include reducing the size of FASB from seven to five members effective 1 July 2008 and vesting in the chairs of the two standards boards the authority to establish board agendas. Click for:

Key Structural Changes Approved by the FAF Board of Trustees

Financial Accounting Foundation (FAF)

  • Expand the number and breadth of investors, accounting, business, financial, and government organisations and entities invited to nominate FAF Trustees with the understanding that final authority for all appointments rests solely with the discretion of the Board of Trustees. The manner of implementation of this open nomination process will be determined pending further discussions among the Trustees and interested constituencies.
  • Change the current term of Trustees from one three-year term with a possible second three-year term to one five-year term.
  • Change the size of the Board of Trustees from a fixed 16 Trustees to a flexible range of 14 to 18 Trustees, the size to be fixed by Board resolution from time to time.
  • Increase the Trustee governance activities, including its level of formal review, analysis, and oversight of the data and materials regularly provided by FASB, FASAC, GASB and GASAC.
Financial Accounting Standards Board (FASB)
  • Reduce the size of the FASB from seven members to five, effective 1 July 2008.
  • Retain the FASB simple majority voting requirement.
  • Reaffirm the need for investor participation on the FASB by broadening the current by-law requirement that FASB members possess investment experience.
  • Change the FASB's agenda-setting process to a 'leadership agenda process' whereby the FASB chair is vested with the authority, following appropriate consultation, to set the FASB project plans, agenda, and priority of projects.
Governmental Accounting Standards Board (GASB)
  • Secure a stable and permanent funding source for the GASB.
  • Retain the current size (seven members), term length (five years renewable once), and composition of the GASB.
  • Change the GASB's agenda-setting process to a 'leadership agenda process' whereby the GASB chair is vested with the authority, following appropriate consultation, to set the GASB project plans, agenda, and priority of projects.

 

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