IFRS Foundation Trustees consult on amendments to constitution
The Trustees of the IFRS Foundation have proposed a series of amendments to their constitution to accommodate the establishment of a new sustainability standards board.
The Trustees of the IFRS Foundation (Foundation) have published proposed amendments to the constitution of the Foundation to accommodate the potential formation of a new International Sustainability Standards Board (ISSB) within the governance structure of the organisation.
The Trustees have also published a Feedback Statement summarising the feedback received to their consultation on sustainability reporting which closed at the end of 2020.
Amendments to the IFRS Foundation constitution
The proposed amendments to the IFRS Foundation constitution will enable the creation of a new International Sustainability Standards Board (ISSB) that would sit alongside the IASB under the existing governance structure of the IFRS Foundation. The structure of the new ISSB would reflect the structure and function of the IASB as far as possible. The remit of the ISSB would be to develop globally accepted sustainability reporting standards. As a result, an amendment to the objective of the Foundation is proposed to reflect that it would comprise two standard setters.
Under the proposals the standards issued by the ISSB would be known as IFRS sustainability standards. The exiting IFRS Standards would be known as IFRS accounting standards.
It is proposed that the new ISSB would be comprised of 14 members, appointed by the Trustees, some of whom could be part-time. Under the proposals, the Trustees would be responsible for appointing one of the full-time members as the Chair of the ISSB. A further full-time member of the ISSB may also be designated by the Trustees as a Vice-Chair.
An amendment to the governance of the Foundation is also proposed whereby the appointment of the Executive Director of the Foundation would be subject to consultation by the chairs of both the IASB and the ISSB.
The eligibility criteria for membership of the ISSB would be professional competence and relevant professional experience. This may result in the appointment of individuals from a diverse range of backgrounds and professions with relevant expertise in sustainability. It is proposed that the board would comprise three members from the Asia-Oceania region, three members from Europe, three members from the Americas, one member from Africa, and four members appointed from any area.
The consultation is open until 29 July 2021 and comments are welcome from all interested parties.
The feedback statement published by the Trustees summarises their response to the 577 comment letters they received to their consultation on sustainability reporting issued in September 2020.
The responses demonstrated broad support for the establishment of a new sustainability standards board as well as an urgent and growing need for globally accepted sustainability reporting standards.