Pressure or potential? If I worked at the International Accounting Standards Board
July 13th, 2010
July 13th, 2010
If I were based at 30 Cannon St in the heart of the City of London, I’d be feeling somewhat under pressure as I made my journey to the state-of-the-art building. Members of this task force have long argued that the IASB, a private company registered in the US state of Delaware, has the potential to transform the way that companies operate to make them more accountable to government’s civil society, to challenge corruption and to help poorer countries to raise revenue to pay for education and healthcare for the world’s poorest people.
But today, the UN published a report suggesting the IASB could make a major contribution towards a more sustainable future for us all – by requiring that listed companies disclose their environmental and social impacts alongside financial statements. Of course, the technocrats will argue that it’s all too complicated. Compliance costs would be huge, there would be so much information that it would be difficult to interpret, it would impact investment and would make things worse; but we’ve heard these arguments before in relation to country-by-country reporting.
The UN is next in a line of big players like the G20 and the EU who have called on the IASB to be more accountable and consider the needs of a wide range of stakeholders – not just investors and shareholders. If I were in charge, I think I’d see the writing on the wall that the tide is turning towards greater transparency. I’d want to be at the forefront – not being kicked into touch by the world’s biggest players.
But I think I might also feel a great sense of opportunity and potential. I’d be speaking to the businesses with foresight. Businesses that recognise the need to protect the environment and invest in the development of new markets if they want to still be doing business in 50 years’ time. Businesses that want their competitors to be looking after the planet and its people too, and therefore recognise the need for global standards. Businesses with the vision to see that sustainability, transparency and accountability are the future.