IFRS Foundation Trustees propose amendments to the Constitution

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30 Apr 2021

The Trustees of the IFRS Foundation have proposed amendments to the IFRS Foundation Constitution that would enable the creation of a new sustainability standards board under the governance of the Foundation. They have also released a feedback statement summarising the main messages they received in response to their sustainability consultation paper.

Proposed amendments to the Constitution

The Trustees are proposing amendments that are a prerequisite for creating a potential International Sustainability Standards Board (ISSB) within the governance structure of the IFRS Foundation. They regard:

  • The objective of the IFRS Foundation. The objective of the IFRS Foundation would be amended to state that the IFRS Foundation has two standard setters: The International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB). Through the ISSB, the IFRS Foundation would "develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted sustainability standards based upon clearly articulated principles".
  • The governance of the ISSB and the IASB. The Trustees propose that the Constitution is amended to stipulate that the Executive Director of the Foundation is appointed by the Trustees, in consultation with the chairs of the IASB and the ISSB. This proposed amendment would clarify reporting lines in an organisation with two standard-setting boards.
  • The name of the new board and its standards. The Trustees propose to name the new board the 'International Sustainability Standards Board (ISSB)'. The new board’s standards would be known as ‘IFRS sustainability standards’.
  • The composition of the ISSB. The new board would normally comprise 14 members. The members of the ISSB would appointed by the Trustees. A minority of ISSB members could be part-time members. The main qualifications for membership of the ISSB would be professional competence and relevant professional experience. The board would comprise three members from the Asia-Oceania region, three members from Europe, three members from the Americas, one member from Africa, and four members appointed from any area. The Chair would be chosen by the Trustees from among the full-time members as would a potential Vice-Chair be.

Please click to access the proposed amendments on the IASB website. Comments are requested by 29 July 2021.

Feedback statement

In September 2020, the Trustees published a consultation paper to assess demand for global sustainability standards and what role the Foundation might play in the development of such standards. They received 577 comment letters indicating great international demand for global sustainability standards and broad support for establishing a standard setter for these standards under the governance of the IFRS Foundation. The feedback statement summarises the responses and states how the Trustees have responded to the feedback.

Please click to access the feedback statement on the IASB website.

A press release announcing the publication of the proposed amendments to the Constitution and the feedback statement is available on the IASB website.

In addition, see Deloitte's IFRS in Focus on the proposed amendments.

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