The new International Accounting Standards Board (IASB) chairman must be part-politician and part-technician, a head of the IASB’s oversight committee has said.
Tommaso Padoa-Schioppa, chairman of the IASB trustees, said the newly-elected IASB chairman Hans Hoogervorst, who will replace Sir David Tweedie in June next year, has the right mix of political and technical experience needed to move the body forward.
“Some of the key challenges facing the organisation in the next two or three years are technical but also highly political,” he said.
The nationality of the candidates was not a factor in the final decision, he told Accountancy Age from Seoul.
“The discussion…was not one where geographical factors played a significant role, it was much more about the profile and what sort of person the IASB would need in the coming years,” he said.
“The final decision gives a blend of political and policy-making experience, negotiating ability and leadership technical, expertise that I think that was seen by all trustees as the lend we need for the future.”
Hoogervorst will begin his new post just as the US is in the final stages of deciding whether to adopt international standards. The IASB has been trying to harmonise international and US accounting rules despite differences in how the two boards account for financial instruments.
Padoa-Schioppa said Hoogervorst had strong US connections.
“Hans has excellent relationships in the United States, he has co-chaired with Harvey Goldstein on the Financial Crisis Advisory Group.
He has a very strong relationship with [US Securities and Exchange Commission chairman] Mary Schapiro and he chairs the International Organisation of Securities Commissions (IOSCO) committee. He has lived in the US and worked there.”
Hoogervorst will also have to navigate a changing political landscape when he begins, with Japan, Argentina, Canada, Mexico and South Korea officially switching to international accounting rules in the next twelve months.
Hoogervorst said he had investor protection “in my DNA”.
“I strongly believe that a global set of accounting standards, set for investors by an independent standard-setter, is an essential component for the world’s financial markets. These will remain my priorities,” he said.
He will also have to work with European finance ministers, who have had a rocky relationship with the IASB since adopting of international accounting rules in 2005. The IASB has so far resisted pressure from Europe to change its accounting rules to meet regulatory needs.
Padoa-Schioppa believes Hoogervorst will be a balanced chairman who will not always agree with regulators.
“There are some regulators concerned with financial stability which may have in some cases different views as to what the best accounting methods will be, just as tax authorities will have accounting rules which are different,” he said
“The credentials of Hans are fully in line with the mission of IASB.”
He will be joined by the UK Accounting Standards Board’s current chairman Ian Mackintosh, who as appointed to the newly-created vice chairman position. Speaking from Seoul, Mackintosh said he had really enjoyed working at the ASB “and working with the fine folk involved with it”.
In an earlier statement he said he has been long-involved in the standard-setting process and understands the challenges facing the organisation.
“I am strongly committed to the cause of global standards,” he said.
Baroness Hogg, chairman of the UK’s reporting regulator, the Financial Reporting Council, congratulated Ian on his appointment and said he would join the IASB at a critical time for international standards.
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