Financial Accounting Foundation
Board of Trustees
Standard-Setting Process Oversight Committee
Board of Trustees
Standard-Setting Process Oversight Committee
|Timothy F. Ryan, Co-Chair||T. Eloise Foster, Co-Chair|
|David H. Lillard, Jr.||Richard N. Reisig|
|Shundrawn A. Thomas||Robin L. Washington|
The Board of Trustees (Board) of the Financial Accounting Foundation (Foundation) has established the Standard-Setting Process Oversight Committee (Committee) to conduct, on behalf of the Board, ongoing oversight and evaluation of the adequacy, transparency, independence, and efficiency of the standards-setting processes employed by the FASB and GASB (Standards Boards) in establishing and improving financial accounting and reporting standards. In addition, the Committee shall (1) proactively oversee the activities between the Private Company Council (PCC) and the Financial Accounting Standards Board (FASB), and (2) ensure that the FASB engages in adequate consideration of private company financial reporting issues throughout the cycle of its standard-setting process. The Committee shall regularly report its findings and recommendations to the Board.
Membership and Structure
The Committee shall be a standing committee of the Board and all Committee members shall be Trustees.
The Committee shall consist of six or more members, at least one of whom shall be a Governmental Trustee (as such term is defined in Chapter A, Article A-I, Section 4 of the Foundation’s By-Laws). At least one member of the Committee shall be a Trustee with substantial experience with and exposure to private company financial reporting. The Chair (or Co-Chairs) and the other members of the Committee shall be appointed by the Board and shall serve until their successors shall be duly appointed and qualified or until their earlier resignation or removal.
In order to expose the maximum number of Trustees to service on the Committee and to enable Trustees to carry knowledge of the Committee’s oversight functions to other aspects of their Board service, the assignment of Committee members shall allow for sufficient rotation among the Trustees on the Committee.
Non-Interference with Technical Standards-Setting
In exercising its responsibilities, the Committee may not direct the Standards Boards to undertake or to omit to undertake any particular project or activity or otherwise affect the exercise of the Standards Boards’ authority, functions, and powers in establishing and improving financial accounting and reporting standards. The foregoing shall not be interpreted as limiting the Trustees’ responsibilities to address and resolve, or the Committee’s authority to evaluate and provide recommendations to the Board in respect to, questions involving the jurisdictional authority, functions and powers of, and as between, the Standards Boards.
The Committee is charged with the following responsibilities:
- Monitoring the standards-setting processes of the Standards Boards and evaluating those processes for consistency with the Standards Boards’ respective mission statements and governing documents. In monitoring these processes, the Committee shall consider and evaluate the adequacy, comprehensiveness, effectiveness and adherence to due process procedures through all stages of the standards-setting process including, without limitation, the following:
(i) The agenda-setting process;
(ii) The deliberations process;
(iii) The finalization process; and
(iv) The implementation process.
- Monitoring each Standards Board’s agenda of projects, the cycle time of projects on the agenda, progress against milestones, and the timeliness, effectiveness and efficiency of the Standards Board in its disposition of agenda projects.
- Monitoring and holding the PCC and the FASB accountable for achieving the objective of ensuring adequate consideration of private company issues through the cycle of FASB’s standard-setting process. Such monitoring shall include the following:
- Observing (and reviewing reports of) meetings of the PCC, and as appropriate, observing (and reviewing reports of) meetings of the FASB at which PCC matters are deliberated and/or acted upon.
- Meeting periodically with the Chair of the PCC and the Chair of the FASB on the operation, effectiveness and efficiency of the interactions between the PCC and FASB.
- Monitoring the leadership and management of the PCC by its Chair, the participation of PCC members in PCC meetings, and the engagement of dialog between the PCC and FASB.
- Receiving periodic reports from the FASB Member liaison to the PCC on the PCC’s activities and interactions with the FASB.
- Monitoring, in consultation with the PCC Chair and the FASB Chair, the adequacy of staffing of the PCC to fulfill its mission.
- Establishing and overseeing the post-implementation review of standards set by the Standards Boards through processes and procedures that are independent of the Standards Boards.
- Keeping apprised of external influences, such as international financial accounting standard-setting activities, Congressional and federal regulatory proposals and actions, and state legislative and regulatory proposals and actions that could be impactful and/or informative to the standards-setting processes of the Standards Boards, and providing recommendations to the Board of Trustees with respect to such influences.
- As deemed necessary and appropriate, conducting and/or commissioning independent studies and surveys relating to the roles, responsibilities, processes and performance of the Standards Boards in fulfilling their missions.
- Monitoring matters of the Standards Boards in order to assess whether they are within their respective jurisdictional authority, functions and powers, consulting with the Standards Boards on any such matters as appropriate, and referring those matters to the Board as deemed necessary.
- Monitoring, and providing input, in consultation with the Standards Boards’ Chairpersons, to other Trustee committees (such as the Audit and Finance Committee and the Compensation Committee) as to the adequacy of staffing of the Standards Boards necessary to fulfill their missions.
- As deemed necessary and appropriate, together with the other members of the Board, observing (or reviewing reports of) meetings and public forums of the Standards Boards and advisory groups.
- Periodically communicating with members of the Standards Boards, advisory groups, and others to obtain input on the effectiveness and efficiency of the standards-setting process.
- Evaluating, including through the development and use of performance measures, the processes employed by the Standards Boards to ensure that such processes are transparent, timely, robust, objective, effective and efficient.
- Maintaining authority to retain, oversee and direct 1) independent counsel and 2) other professionals as appropriate to assist in the performance of its duties, including assisting in the conduct of or authorization of any investigation that is consistent with the Committee’s scope of responsibilities.
- Performing such other functions as assigned by law, the Foundation’s certificate of incorporation or By-laws, or the Board.
- Determining the anticipated funding and resource needs of the Committee and notifying the Foundation of such requirements.
- Regularly reporting the Committee’s findings and recommendations to the Board.
- Performing periodic self-assessments of the Committee’s roles, functions and performance that will include a review of the Committee Charter and a recommendation to the Board of any necessary or appropriate amendments.
This charter may be amended only by the affirmative vote of the Board.
Approved by the FAF Board on November 15, 2016; effective January 1, 2017