Amongst the many qualities and attributes it noted was his ability to take the most senior of people down a peg or two if they started talking nonsense, the blather of politics. And it was also obvious to all of us who were present at those meetings that he didn't feel that fierce argument would fail to produce consensus. Quite the opposite in fact.
That was a few years ago now and Hoogervorst has now stepped up to the chairmanship of the IASB. But his ability to express the nub of the issue in clear, unequivocal and logical terms is unabated. The morning he took over the IASB chair he issued a statement which, in amongst many positive things, referred back to his time as Dutch Minister of Finance and as Chairman of the Dutch securities and market regulator. This is what he said: 'It was during this time that I developed a strong belief in the importance of transparency and openness in financial reporting. Indeed, during the crisis I spoke out in favour of maintaining the highest levels of transparency in financial reporting, much to the annoyance of those, (and there were many), who believed at the time that the accounting could be neutered in order to "protect" investors and the markets from being spooked'.
So it should have come as no surprise during his first public speech as IASB Chairman in Zurich in the same week, to find him making the same point. The accounting during the crisis may not have been perfect but using accountants as scapegoats for failures in the system was just not on. He constantly emphasised that the fatal flaws had been in economic standards rather than accounting standards, such as gaming the Basel capital ratios.
He talked of the priorities: revenue recognition, lease accounting, and financial instruments. All familiar sticking points in recent months but he engaged them with vigour. He signalled the publication of a consultation paper to look at what should be on the post-convergence agenda up ahead. And he underlined the way that future projects would be chosen: what was urgently required and what would be the best use of the IASB's resources.
And he treated the vexed issue of the US decision to go for IFRS or not with skill, charm and understanding. But he thought in the end it would be hard for the US, a member of the G20 nations which have repeatedly signed up to the idea of one global accounting language, not to do so. If a global language is to come about it is pretty well bound to be IFRS and if the US wants to remain a leader in international financial reporting then it would be hard to understand why they might want to go it alone. IFRS, he pointed out, had already linked the rising economic giants of the East with the longer established economies of the West. IFRS was all about economic growth and globalisation.
This was good persuasive stuff. And it was expressed with force and a smile. The Hoogervorst method, so familiar from the FCAG experience, was there: Explain the logic and leave no wriggle-room for those who propose a different, and lesser, answer.
Then, in answering a question, he took his style to a different level. He had touched upon the problem of impairment and the pressing issue of Greek government bonds during his speech. But in the questions afterwards the topic was opened up again. And it became clear that he felt that it was time for the EU to endorse IFRS 9, which has languished in the in-tray for a couple of years now. And the reason he was suggesting this should be done was not so that they could continue some tit-for-tat squabble over the technical issues involved. It was because, as he elaborated, it would be of enormous use in easing problems over Greek debt.
With that one single suggestion he elevated the debate to another plane and showed where the accounting high ground of the future would be situated. It was not going to be in the field of arcane technical matters, which only the technocrats would comprehend and then argue over them for months and years. The Hoogervorst future is at the heart of the widest economic and business issues. The global stature of the IASB will be reinforced further and take its place at the table where it will become even more obvious that financial reporting is at the heart of economic progress.
Robert Bruce
July 2011
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