Global Standards for the world economy

Thursday 21 January 2021

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Major changes as part of the 2005 Constitution Review

The Trustees recommended the following nine major changes as part of the 2005 Constitution Review:

  1. That the IFRS Foundation should expressly refer to the challenges facing small and medium-sized entities and emerging economies.
  2. An increase in the number of Trustees, with six each from North America, Europe, Asia/Oceania region and four from any area subject to establishing overall geographic balance. Changes were also made to the term of the Chairman of the Board of Trustees.
  3. The Trustees introduced a high-level advisory group to assist in advising in the selection and appointment of Trustees.
  4. The wording of the Constitution was changed to permit some flexibility in the manner of financing the IFRS Foundation.
  5. The Trustees made constitutional changes to ensure that the composition of the IASB would be based not solely on technical expertise but on a broad range of perspectives and skills, including practical experience.
  6. Changes were made to recognise that the IASB already has liaison relationships with national standard-setters and other official bodies concerned with standard setting.
  7. Changes were made to ensure that the IASB must follow appropriate due process procedures, provide time and channels for consultation and give reasons if it does not follow any of the non-mandatory consultative procedures.
  8. Changes were made to the IASB's voting procedures to allow the introduction of a qualified majority voting procedure for the introduction of an IFRS.
  9. Changes were made to separate the chairmanship of the IASB from the chairmanship of the SAC and to strengthen the link between the SAC and the Board of Trustees. Please note that from 31 March 2010, the SAC has been renamed the IFRS Advisory Council.

The Trustees originally discussed ten issues, but on the topic of the resources and effectiveness of the IFRS Interpretations Committee the Trustees have not made any constitutional change on this topic and noted that many of the comments during the Constitution Review on this topic reflected operational issues rather than constitutional questions.