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December 14, 2008

IASC insists no conflict for Zalm over ABN AMRO bank job

By Nicholas Moody

The International Accounting Standard’s Committee Foundation (IASC) has denied its chairman of trustees has a conflict of interest after being appointed chief executive of newly nationalised Dutch bank ABN AMRO, which has merged with Fortis Bank.

Gerrit Zalm, the current chairman of the International Accounting Standards Board’s (IASB) oversight body, said he does not believe his new appointment affects the independence of the IASB.

“There is no constitutional restriction on the chairman of the trustees holding other executive or non-executive roles,” Zalm said.

A spokesperson from the IASC confirmed there was no constitutional restriction.

Zalm, a former Minister of Finance for the Netherlands, said there was a clear split between the work of the trustees, which is responsible for the governance of the organisation, and the technical work of the IASB.

“As chairman of the trustees I do not get involved in the standard setting process,” he said. “However, my role certainly is to support the organisation wherever I can to achieve our goal of a single set of standards used throughout the world, and for this to happen the independence of the IASB is vital.”

Zalm’s appointment comes at a time when the IASB has been under pressure to amend accounting rules, especially from banks, and defend itself against political interference. Last month Zalm wrote to G20 ministers on behalf of the IASC asking them not to tamper with existing accounting rules.

Before his appointment at ABN AMRO, Zalm was chief financial officer of DSB Bank in the Netherlands.

The IASC said many of his fellow trustees also hold senior executive roles in large financial institutions. Their experience in leading such organisations contributed to the knowledge and diversity of the trustees, it noted.

One of Zalm’s fellow trustees is Pedro Malan, chairman of Brazilian bank Unibanco, which merged with Banco Itaú in September to create the largest bank in Latin America.

UK Accounting Standards Board chairman Ian Mackintosh said the issue was less a matter of a conflict of interest issue and more whether Zalm could handle the workload.

“I think the two roles can be fitted together, although you appreciate that the role of chairman of trustees of the IASB Foundation is particularly testing at the moment. It is okay but he is going to really have to be working,” Mackintosh said.

Zalm said that as a former deputy prime minister and finance minister he was used to working under time constraints and knew how to handle many things at the same time. He said it was also important for the IASC to have continuous leadership at this point in time.

Nicholas Moody

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