Consistent themes

Several participants noted the great strides made by the IASCF and the IASB to improve its governance, structures, consultations, and other operational aspects of its activities, but noted that perceptions of the organisation were still often negative. The Trustees and the IASB needed to do all things necessary to reverse these perceptions. The amendments proposed by the Trustees could lay the foundations of such a shift in perception.

The participants expressed broad agreement with the majority of the proposals. Five areas were consistently highlighted.

Agenda setting

Participants want the Trustees to be bolder and require a formal public consultation, not necessarily annually but regularly, on the IASB's agenda and priorities. The SAC, even in its latest incarnation, is not able to represent all constituents. Consequently, to ensure that the IASB's agenda and the priority it assigns to the projects on it have the support of as many constituents as possible, public consultation is necessary. In the words of one participant, the IASB should make as much effort over setting the agenda as over the standards themselves.

The importance of establishing 'feedback mechanisms' on the IASB's agenda-setting activities that were, and were seen to be, an effective engagement with constituents, was mentioned by almost all participants.

Participants and Trustees expressed the hope that such a process could be developed without becoming overly bureaucratic.

IASB's Due Process

Many participants suggested that the IASB should be required to provide feedback to constituents, especially the SAC, about how it used the comments it received on agenda proposals and formal consultation documents, not only where the Board accepted arguments, but as importantly why it did not accept those who disagreed with the proposal or offered an alternative approach. This feedback was seen by many as essential to maintaining the IASB's legitimacy as a responsible and responsive independent standard-setter.

Participants recommended that the IASB be required to undertake a substantive redeliberation of an issue in the face of a substantial, unorchestrated level of opposition to a principle. In addition, the IASB should be encouraged to conduct field tests of proposals that are controversial or change existing practice in an untested manner.

Fast-track Due Process

This was the topic that received the most comment. While some, including the European Commission representative, supported constitutional language to facilitate it, many were opposed. Those who were opposed noted that the current 30-day due process was the bare minimum that constituents, especially representative organisations, could reasonably be expected to consult and formulate a thoughtful response to a proposal. Others saw it simply as unnecessary and likely to be open to abuse.

IASCF Oversight

Most participants thought that the constitutional provisions for IASCF oversight of the IASB were sound, but that the operational aspects of those provisions (benchmarks, etc) should be documented properly so that constituents could make their own judgements about whether the Trustees (and Monitoring Board) were actually providing appropriate robust oversight of the IASB.

Funding

Many participants, while acknowledging that the IASCF had a difficult task negotiating with so many different jurisdictions and regions, noted that the IASCF needed to establish a sustainable funding regime as quickly as possible. Adequate funding helped to insure independence, while a lack of independence brought with it the danger of retreating from due process. While noting the European Commission's proposal for EU-level finding, participants noted that such funding might not be as desirable (or sustainable) as funding from preparer companies and users of the financial statements.

Other issues

• Some participants commented on the proposals for IASB members' terms: while most accepted the '5 years + 3' proposal, some urged that flexibility was more important subject to an overall maximum term (as now). There was a worry that experience could be lost and that there could be disruption to the standard-setting activities as a result.
• Some participants thought that the IASCF's relationship with the Monitoring Board was still unclear and should be clarified. The Trustees had stated that it was separate from or outside the IASCF 'envelope' and yet the operations of the IASCF and the Monitoring Board seemed to contradict that statement.
• Many participants supported the possibility to appoint up to two vice-chairmen for each of the IASCF and IASB, seeing that this would help with the outreach activities of both parts of the organisation.
• Some participants wanted a stronger statement in the Constitution about the role and interest of prudential regulators in the activities of and standards issued by the IASB. However, other participants were equally strongly of the view that the investor community should be recognised as the primary user group. Prudential regulators have extra powers that enable them to obtain additional information from entities – a power not available to investors. However, participants agreed that there should be dialogue between the IASB and prudential regulators and others with legitimate interests in financial reporting standards.
• There were varying degrees of enthusiasm for the change of name, with some seeing it as vital and others mostly irrelevant.