Exclusive: Zalm denies conflicts and will remain at IASC

Gerrit Zalm, IASC chairman

Gerrit Zalm, the chairman of the parent body overseeing the International Accounting Standards Board, has rejected criticism and said he will stay on as chairman despite being appointed to head the new bank formed from the merger of Fortis and ABN Amro.

Zalm, chairman of the International Accounting Standards Committee and a former deputy prime minister and finance minister for Holland, was accused of facing conflicts of interest in holding a position at the head of an international bank while being chairman of trustees for the body setting accounting standards for financial institutions.

But he told Accountancy Age today that he sees no conflict because he is not directly involved in setting the standards, only overseeing the governance of the IASB.

He said he would stay on as chairman to see the IASC and IASB through the current financial crisis.

'I have thought about it because of the time constraints and I have decided to go on with it because it is a turbulent times and continuity is now also key. A change of chairman will be troubling for the organisation.

‘You must realise that we as trustees are not setting the standards. I don’t think that the conflict of interest issue is a real objection,’ he said.

Zalm added that current CEOs and corporate chairman were also on the board of trustees. He is currently finance director of DSB Bank until he takes over Fortis/ABN in March of next year.

The Dutch government appointed Zalm to run the newly nationalised bank at the end of November.

Zalm said he had discussed the appointment with executives at Fortis and ABN as well as with shareholders and believed he could also cope with the demands on time the bank would represent while still working with the IASC.

‘The way to do it is to create a very good team at Fortis/ABN which is what I am doing now. When you are a finance minister you have 30-40 subjects to deal with at a time. I am used to doing a lot of things under a certain time pressure,’ he said.The

Zalm took the lead when it was feared that the IASB’s role might be threatened at the recent G20 meeting in Washington writing to all heads of state to ensure the standard setter could continue its work independently.

The move was met with immediate criticism. Nicholas Veron, a research fellow at the Breugel Institute in Brussels, said it would be ‘perceived by most market participants as difficult to reconcile with the IASB’s full independence from specific interests.’