Tweedie replacement must juggle dual roles

The hunt for Sir David Tweedie’s replacement at the International Accounting
Standards Board (IASB) is boiling down to a decision between appointing either a
techie or a diplomat.

An ever-dwindling shortlist has left the IASB’s selection panel with a choice
between two archetypes, a diplomat to sell and defend accounting rules or a
technician to create them. Sir David, whose chairmanship ends in June 2011, is
widely considered to be both.

Time spent as chairman of the Accounting Standards Board (ASB) imbued Sir
David with standard-setting expertise, while ten years promoting and, at times,
defending, accounting rules has shown him to be an able diplomat. As the sun
sets on his time, debate within the IASB has turned to his replacement, with
many in the industry believing that both qualities are vital.

“It has to be somewhere in between – you could not have a diplomat that does
not know what the board is talking about,” said Ken Wild, senior technical
partner at Big Four firm Deloitte. “If you don’t understand the accounting, you
won’t be able to do the diplomacy around the debate.”

The IASB launched the search for Sir David’s successor in December, last year
led by recruitment firm Spencer Stuart. Staff at the IASB report “a list” being
worked through and circulated among senior staff. Names from across the world
have poured in, including notable UK candidates, with an announcement believed
to be made later next month.

The ICAEW and the Big Four have put forward candidates, however the names are
being kept under lock and key. Richard Sexton, head of audit at PwC, suggested
the role should be split. He said it was hard to envisage a single individual
covering both the “chairman” and “CEO” roles. “Having an active chairman to help
the incoming CEO and share the load is key to the IASB’s success,” he said.

Mary Tokar, head of international financial reporting group at KPMG, said
technical know-how is the “the beginning rather than the end” of the skill set
required. “The chair has to drive a technical agenda that is responsive to the
needs of capital market participants, and also has to build acceptance of the
IASB’s product, so the role also requires the skills of a strategist, diplomat
and an ability to speak the language of regulators – and a crystal ball wouldn’t
hurt,” she said.

Ruth Picker, global IFRS leader at Ernst & Young, said it is possible to
find a chair both technically and politically savvy. “The risk of having a
person who is either one or the other and not able to balance both is that they
may lose the support of their board, if a ‘diplomat’ only, or of their
stakeholders, if a ‘techie’ only.”

Steve Maslin, chair of the partnership oversight board at Grant Thornton,
believes the IASB must be “much more politically aware”. “Let’s not forget also
there is the rest of the board and a team of staff who can help with the heavy
lifting on the technical side,” he said. “At this stage in the IASB’s life, we
would place political awareness ahead of technical [knowledge] for the chair,
but of course the chair must be technically astute.”

Jeremy Newman, head of BDO International, has previously stated he believes
the role should be split. “It’s unrealistic to expect one person to cover both,”
he said. Geo-politics will also play a role in the appointment, with many
believing a non-UK appointment would better reflect the IASB’s growing
international mandate.

David Wood, executive director of technical policy at ICAS, said
trans-Atlantic tensions may work against European or US candidates. “The
Europeans will not be happy with an American and the Americans will hot be happy
with a European,” he said. “The job that David started ten years ago is not the
one he is leaving… There are people out there – a fairly small number – who
can combine the technical and diplomatic skills.”

In February, Stig Ene­voldsen, then chairman of the European Financial
Reporting Advisory Group, told Reuters that Tweedie’s replacement would need a
vast, if not insurmountable, skill set. “If you look at requirements for the new
chair, the only thing that is not included is that he should be able to walk on

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