Sir David Tweedie is an awkward individual. He has many other qualities. He is humorous, astute, charming and thoughtful as well. But the default setting is very often just simple awkward. Who else would find that presiding over the International Accounting Standards Board, (IASB), for the last time in his decade of chairing the organisation he would feel impelled to put himself down as a dissention for only the second time in his chairmanship? And he was in a minority of three as well. But he felt it was important so he went ahead and did it. There is still something in him of the Scottish rugby enthusiast who revels in a disputed penalty kick in the last minute of a match.

He is stepping down after over twenty years of trying to bring order to financial reporting and get that order embedded around the world. The first decade was spent as Chairman of the UK Accounting Standards Board. He was brought in at a time when chaos and corporate disorder were the name of the game. He spent his ten years diligently bringing everyone to heel. Then he was made Chairman of the IASB to try and do something similar to financial reporting around the world. And his decade has been extraordinary. When you talk to observers and colleagues about the achievements of the IASB the sort of phrase which comes into the conversation is: 'no one would in their wildest dreams would have expected us to achieve this'. From a more or less standing start some 120 countries now follow International Financial Reporting Standards, (IFRS). The G20 has the attainment of a global reporting language as one of its stated goals. Only the US still stands outside and it is widely expected to decide upon a route towards joining in later this year. This is why, when you ask Tweedie what the best time in his Chairmanship was he answers: 'The best is still to come and that will be when the Americans say: 'Yes'".

To understand the scale of what has been achieved it is important to go back to the context at the outset. 'Our role isn't what I thought it was going to be' says Tweedie. 'I thought our job was really to write particular standards, so if the Australians wanted a leasing standard they could take that one, if the French were short of a revenue recognition standard they could take our revenue recognition standard. Instead of which we have become the standard-setter for the world and our role changed at that point. So the last ten years has been fixing what we inherited while selling the global vision. We're almost there. It's not quite there. The American decision is critical because that will influence Japan, which will influence China, which will influence India'.

There were two early changes. IOSCO, the stock market's regulator, announced that the standards inherited by the IASB weren't fit for international purpose. And after a few months the European Commission decided that IFRS would become mandatory for listed companies in Europe from 2005. The roller-coaster ride which started then is still running. But both the IOSCO and the European decisions changed things drastically.

'What we didn't expect was to be the world standard setter and that changed almost instantly with the EC decision', he says. 'But then we were faced with the IOSCO position on the existing standards which they said weren't fit for purpose. They were broadly fit but not as an international set. So we had to fix them and so it was a process of working through the standards to knock them into shape, which took about four years. It was horrible. We didn't like it. There were not a lot of conceptual ideas in it. It was just – "this doesn't make sense, take these four paragraphs out and slot these ones in"'. This work included a patching-up of the standard on financial instruments, a growing area of extraordinary complexity as the financial world did ever more creative things with them. 'With IAS 39 all we could do was tinker', he says. 'We couldn't do much, but tinkering actually made everyone think we had written the thing and we got all the flack for that'. And then came the Memorandum of Understanding with the US authorities to speed the possibility of removing the need for non-US companies to produce a reconciliation statement with the US GAAP rules produced by the US standard-setter, FASB. This grew into the process of convergence between IFRS and US GAAP, which still continues. Hard and unproductive though the work often felt, it did move the process into a truly global arena.

And this is partly why, when Tweedie came to the end of his decade there was frustration that all of the programme insisted upon by the G20 and the needs of the convergence programme had not been knocked on the head before he handed over the Chairmanship to the incoming Hans Hoogervorst, his successor.

'It was frustrating in a way, there were certain things that I knew we couldn't finish', he says. 'It would have been nice to have finished them. But you have to walk away. That is life. We almost got revenue recognition and leases done. We decided to re-expose revenue recognition, not that we had to technically, but it is one of these standards that is all encompassing. It is going to delay the thing for a bit but I don't think there will be many changes. It is more a quality control check. The only problem is if the process becomes a precedent and then everything has to be exposed once you finish it. We have never done that before. If that does happen, then every project adds a year'.

Tweedie espouses the simple and direct life. 'Even if there is a division simply just view position A, and view position B. Then pick one'. Unfortunately life is not that simple. In his farewell words to his last Board meeting Tweedie pointed out that they had been working on the convergence project since 2002 and were still at it. He joked about Winston Churchill's observation about Americans. 'They always come to the right answer', quoted Tweedie, 'but only after they have tried everything else'.

This has particular resonance in the international context. Tweedie's view is that countries need to sign up to the whole deal and if they don't like the whole deal then they need to get inside the IASB decision-making process and influence it. 'Ultimately you've got to make a choice and they have got to accept that choice. Take India, for example. They say: "Well, we want IFRS but we want 10 carve-outs. And the argument I put to them is do you think what you are doing is an improvement for your country or is it not. And if it is not, then just stay with your own standards. But if it is, then you have to do what we have to do when we sign off on a standard individually. And in almost every standard we put out there is something in it you really dislike. But on the other hand you have to look at it and say, on balance, is it better than the one it's replacing, and if it is, our rules are that you must sign for it. And I think countries have got to do that as well. You may not like some of our standards but you are taking the lot. Then work from the inside to try and get it changed. With the new standards we will review them after two years anyway so if you can get enough support then, when the agenda comes up, get it changed'.

But the world really awaits the decision of the US regulator, the SEC, to provide some kind of green light to a programme which would lead to the US, eventually, joining with the rest of the world in using IFRS. Like so many issues in the world of accounting the problem is not a technical one. It is a cultural one.

'I think the idea of American exceptionalism dies hard', he says. 'America doesn't hand things over to international bodies very easily. And I think the SEC has a difficult decision. It quite clearly believes in global standards and you get someone like Tim Geithner who will say that financial reform globally is impossible unless we get the accounting architecture sorted out and Jean-Claude Trichet said the same thing. They accepted that we ought to have one set of standards at the G20. The problem I think they have is that a lot of American companies focused on domestic clients and they say "why change, this is going to cost me money. I'm used to our system so why should we do it"'.

So it comes down to the political niceties. 'My personal view is that they are more likely to say yes than no, as a consequence of saying no is to question the value of the last nine years of convergence work. The agenda has been slanted towards getting them in'.

The real impact of the IASB's work is often lost in a miasma of technical arguments. The economic impact, in the wider sense, is sometime obscured by this. Tweedie quotes the relative share of the global equity markets. 'When we started the US share of the global equity markets was 52% and Asia was about 14%', he says. 'Now America is 31%, and Asia's 32%. Europe takes about 30% and hasn't changed much'. This is partly why the US needs IFRS in the long run. And it is also partly why the balance of power in the IFRS world is changing.

'Cumulatively it will reduce the cost of capital', he says. 'There are studies that have shown that in Europe IFRS has reduced it by 47 basis points. That is a huge amount and the more that can be done, the more you end up with more investment and more growth. So we are talking macro-economics. We are not just arguing over what type of lease accounting you have. It's very important that we do that and that's the big global effect'. And it is not confined to the largest companies either. The SME standard has extended the value of IFRS to a mass of smaller companies which now do business right around the world. 'We are hearing from people: "We now understand our suppliers, we understand our subsidiaries and it is better when we get the whole system together". It's an idea whose time has come but it should have come a long time ago really', he says.

Now he hands over the Chairmanship to Hans Hoogervorst, a former Dutch Minister of Finance and securities regulator. They get on well together. Hoogervorst co-chaired the Financial Crisis Advisory Group. He was Chair of IOSCO's technical committee. He may not have an accounting qualification after his name, but he knows the business. I asked Tweedie what advice he had for Hans. 'I don't think you need to give Hans very much advice', he says. 'That's why he is such a good choice. This game is all about change management. You can say it's technical but how far can you go technically? It's pragmatism'.

And in any case the IASB is now a very different organisation to the one Tweedie first joined. We were speaking the morning after the staff had given him a farewell party. ' As I said to the staff last night, I am handing my baby over for adoption', he said. 'But the baby's ten and a half years old now and heading towards teenage years, which need a different form of parenting.'

June 2011