The International Corporate Governance Network (ICGN), with members from 47 countries responsible for global assets of US$15 trillion, has urged the International Accounting Standards Committee (IASC) to prioritise investors, not auditors, as the key stakeholders in the setting of global financial reporting standards.
A letter from the ICGN to the IASC Foundation states that “unfortunately the perspective provided in the Review of
the Constitution and in the primary objective, does not sufficiently address the role of investors and shareholders in their capacity as providers of long-term capital to the global capital markets”.
While the ICGN supports the primary objective – to develop, in the public interest, a single set of high quality, understandable and enforceable global accounting standards that require high quality transparent and comparable information in financial statements and other financial reporting to help participants in the world’s capital markets and other users make economic decisions – it says that the view of the investor and shareholder is not adequately
“We urge you to take into consideration the inclusion of an effective governance mechanism to ensure that investors
and other users are significantly and properly represented in the governance of the IASB and the primary objective outline the importance of investors,” the letter said.
“It should be a fundamental principle that the standard setters are accountable to those that use their standards…
Investors put their trust in the hands of the standard setters to ensure the quality, relevance and appropriateness of those standards.”
The ICGN, a collective of institutional and private investors, focuses on nine main areas of governance falling
under the sub committees: accounting and auditing practices; anti-corruption practices; corporate governance principles; cross-border voting practices; director and shareholder engagement; executive remuneration; non-financial business reporting; securities lending; shareholder responsibilities; and shareholder rights.
The purpose of the accounting and auditing practices committee is to address and comment on accounting and
auditing practices from an international investor and shareowner perspective. The committee through collective comment and engagement aims to ensure the quality and integrity of financial reporting around the world.
Board members of the ICGN include Christopher Ailman, chief investment officer of CalSTRS, Michael O’Sullivan,
president of the Australian Council of Superannuation Investors, Yuji Kage, chief investment officer of the Pension Fund Association (Japan), and Rients Abma, executive director of Eumedion (The Netherlands).