Former Dutch finance minister Hans Hoogervorst has been tapped to succeed Sir David Tweedie as chairman of the International Accounting Standards Board. The appointment was announced Tuesday by the trustees of the IFRS Foundation, the parent organization of the IASB.
Tweedie, who will step down at the end of June 2011, has been the only chairman of the IASB since its founding in 2001. His legacy undoubtedly will be his effort to establish international financial reporting standards as a global set of rules. Today, IFRS has been adopted by more than 100 countries.
Hoogervorst is currently chairman of the Netherlands Authority for the Financial Markets, the Dutch securities and market regulator; chairman of the technical committee of the International Organization of Securities Commissioners; and co-chair of the Financial Crisis Advisory Group (FCAG), an independent body of senior leaders formed to advise accounting standard-setters on their response to the global financial crisis. Hoogervorst is also chair of the IFRS Foundation Monitoring Board. He will give up these roles when he joins the IASB next summer.
Hoogervorst’s experience and background made him an “immensely attractive” candidate, says Robert Glauber, vice chair of the IASB trustees, the group that appoints board members. “On the crucial issue of independence, his record is crystal clear: he is deeply committed to investor protection and to the independence of standard setting, and he is willing to stand up and speak strongly in defense of what he believes.”
Board independence became a high-profile issue during the height of the financial crisis. At the time, politicians from the European Union forced the IASB to circumvent its due process and quickly push out accounting rules related to financial instruments as a way of addressing a perceived disadvantage between U.S. and EU corporations. Hoogervorst will “strongly” defend the board’s independence, “partly because of his background and partly because of his personality,” says Tom Jones, former vice chair of the IASB and currently director of Pace University’s Center for the Study of International Accounting Standards. “You can’t set standards by negotiation; it’s impossible, and [Hoogervorst] is the guy that knows that well,” says Jones.
Indeed, in a May 2009 interview with CFO, Hoogervorst spoke candidly about the forces that strong-armed the IASB during the financial crisis. The banks and politicians who apply “continuous pressure” on standard-setters to alter fair-value and impairment rules have “no natural interest in transparency,” he said. As co-chair of the FCAG, he said he felt “increasingly uncomfortable” with the “lopsided” standards that could result if the politicians got their way.
Hoogervorst’s appointment comes two weeks after Robert Herz announced his retirement as chairman of the Financial Accounting Standards Board. Herz left FASB 2 years shy of his second term, while Tweedie is finishing out his 10-year stint at the IASB.