He’s not an accountant but will it make any difference? Hans Hoogervorst, a former Dutch finance minister and currently head of the country’s financial regulator, is the new man in charge of international accounting standards.
Sir David Tweedie, the combative chairman of the International Accounting Standards Board (IASB), is due to leave his post next year. Hoogervorst was named as his successor last week after an exhaustive hunt for a new chief.
His appointment came as a surprise as he had apparently ruled himself out for the post but he now faces the challenge of guiding international standards through the dangerous waters of international politics and the project to converge with US standards.
In an interview with Accountancy Age Tommaso Padoa-Schioppa, the chairman of IASB trustees, said Hoogervorst 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 lead we need for the future.”
Hoogervorst’s CV is impressive. He obtained a masters in international relations at John Hopkins University and worked for the National Bank of Washington between 1983 and 1986. He then moved to the Dutch finance ministry where he was a policy officer for international monetary affairs. After that he spent six years working on policy for the Dutch party VVD before becoming a parliamentarian himself in 1994.
He was brought into the Dutch cabinet serving as secretary for social affairs until 2002 when he was put in charge of the Treasury and the ministry for economic affairs. A year later he moved to head the health department where he supervised the introduction of mandatory heath insurance policies for all Dutch citizens.
In 2007 he took over running the Dutch financial regulator, AFM, and later served as joint chairman of the IASB’s Financial Crisis Advisory Group looking at the accounting implications of the global crisis.
What happens next?
With Ian Mackintosh installed as vice chairman and likely to concentrate on the technical work on new standards, Hoogervorst’s role will undoubtedly be to take over the political leadership of the IASB. He takes office 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: “Hans has excellent relationships in the US, 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, with Japan, Argentina, Canada, Mexico and South Korea officially switching to international accounting rules in the next year.
Hoogervorst said he had investor protection “in my DNA”, adding: “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 will also have to work with European finance ministers, who have had a rocky relationship with the IASB since adopting 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.”
Cowgill Holloway and Warings Business Advisors have merged, with a range of growth plans in the North West put in place
Improvements to cashflow statements are being targeted in a consultation launched by the Financial Reporting Council (FRC)
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season