On the money with Gavin Hinks
Gerrit Zalm is staying on at the IASB, the body that oversees the work of the international accounting setter, despite also becoming the head of the massive new Dutch bank formed from the merger of Fortis and ABN Amro
At first the critics launched accusations that this presented a conflict of
interest. They questioned whether you could run a bank and also chair the
organisation supervising accounting standards for banks.
Zalm has reassured us he is not conflicted because he is not directly
involved in the standard setting. I can’t help but think that the conflicts
issue will run a little longer and keep a number of people murmuring
disaffection for some time to come.
I have to say though, my growing concern is the time commitment that will
come from handling the two jobs side-by-side. The G20 in Washington, plus French
lobbying against fair value and the standard they love to hate IAS39 has
made it clear the job at hand for the standard setter is not standard setting,
but politics, diplomacy and lobbying. Opportunistic presidents, rampaging
members of congress, bankers and scheming civil servants all have to be fended
off and put in their place.
Within another G20 coming up in the Spring, and the IASB looking like it will
fail to meet demands made by the European Union by Christmas, the pressure is
going to be back on the standard setter and that requires a single minded and
committed individual to argue their case.
Zalm has said he can make the time commitments. But I can’t help but think
that the IASC job needs more time, not a commitment to the historic demands.
Perhaps it’s worth thinking about this as the IASC considers its
constitution. It certainly wouldn’t go amiss.
Gavin Hinks is editor of Accountancy Age