From the President’s Desk
There’s a song on George Harrison’s last album—posthumously released—that features a thought-provoking refrain. It goes like this: “If you don’t know where you’re going, any road will take you there.”
The point, of course, is that if you don’t plot a carefully considered course for the future, you could, literally, wind up anywhere. That’s true for individuals. And it is certainly true for organizations.
And that is the central reason that the Financial Accounting Foundation, the Financial Accounting Standards Board, and the Governmental Accounting Standards Board earlier this year began working with the FAF Board of Trustees to develop an updated strategic plan for the organization.
The goal was to establish clearly articulated, easily understood statements of our vision and our mission, accompanied by a list of our top priorities. Our plan was to use this as an opportunity to initiate an in-depth dialogue about these issues, not only internally, but also with our stakeholders, and then craft a high-level planning document to guide us as we move forward in the months and years ahead.
After several months of work, we’re at a point where we would like to share a draft of this plan with you, our stakeholders—and we welcome your comments. Please feel free to share them with us by sending an email to: email@example.com. Our expectation is that the FAF Board of Trustees will consider adopting the plan at the Board’s February 2015 meeting.
Before I delve into the details, let me make a few observations.
First, the strategic plan is evolutionary. Those of you who have followed our work over the years will not find much that is unfamiliar or surprising. But you will find some nuanced changes relating to aspects of how we carry out our mission.
Second, the draft plan is the result of extensive consultation with our stakeholders. Before we developed the draft, we retained consultants to interview a broad spectrum of our stakeholders. To encourage candor, we decided that the feedback provided would remain anonymous. In the end, our consultants spoke to more than 125 of you, asking important questions about our organization and our future:
- How should we prioritize differing stakeholder needs?
- How should we measure our progress?
- Should we become more pro-active in our response to accounting issues?
- What is our proper role in the international arena?
- How can we recruit and retain the best people?
- What should be our role in education?
We reviewed your anonymous responses, and considered them carefully during the following months, as we developed our strategic plan. We very much appreciated your thoughtful perspectives and ideas, all of which were reviewed and discussed; they helped inform the plan that we are sharing with you today.
As we say in our introduction, our strategic plan affirms that the principal objective of our organization is to develop the highest-quality financial accounting standards that will promote financial reporting that offers investors and other users of financial statements a clear window into the financial condition of companies both public and private, not-for-profit organizations, and state and local governments.
The plan recognizes that another critical element of our mission is to foster better understanding among all of our stakeholders as to how those standards should be implemented.
I urge you to read the full draft of the plan. For your convenience, I’ll try to summarize its key points—our vision, our mission, and our priorities—in the following few paragraphs.
First, our vision:
Our vision is to be a recognized leader in financial accounting and reporting.
The core principle of the plan is that the FAF, the FASB, and the GASB will be best-in-class in their roles, setting accounting standards of the highest quality through a comprehensive process that embodies our commitment to our core values: integrity, objectivity, independence, transparency, inclusiveness, and leadership.
Second, our mission:
Our mission is to establish and improve financial accounting and reporting standards to provide useful information to investors and other users of financial statements, and to educate stakeholders on how to most effectively understand and implement those standards.
The FAF, the FASB, and the GASB each contributes to the overall mission. The FASB and the GASB are charged with setting the highest-quality standards through the best possible process. The FASB sets standards for public and private companies and not-for-profit organizations, while the GASB sets standards for state and local governments.
The FAF is responsible for both overseeing and supporting that work to ensure an independent, inclusive, and effective standard-setting process. The FASB and the GASB are committed to following an open, orderly standard-setting process that encourages broad public participation by creating opportunities for all points of view to be heard at each stage of standard setting. We recognize that we earn our independence by being accountable to all of our stakeholders—and we believe that sharing this plan with you is part of that process.
Another element of our mission is to educate stakeholders on how to most effectively understand and implement the accounting standards developed by the Boards. The plan refers to “education” in the broadest sense—making sure that resources and explanatory material at both the technical and “plain-English” level are widely and easily available to users, preparers, and practitioners through a wide spectrum of channels at the lowest possible cost.
The draft plan also identifies our four top priorities. They are:
- Practicing and promoting continued excellence in standard setting
- Demonstrating a commitment to leadership in standard setting
- Building and maintaining trust with stakeholders
- Contributing to the public discourse on current and future financial reporting issues.
Simply put, this means that we will set the highest quality standards through the best possible process, one that embraces and promotes integrity, objectivity, independence, transparency, inclusiveness and leadership. As part of this process, we always will consider first the best interests of those who invest and otherwise participate in U.S. capital markets, as well as others around the world who use or rely on GAAP.
Demonstrating a commitment to leadership in standard setting
We will create the highest-quality accounting standards through a process that reflects our core values. This will result in our work being recognized, respected, and, where appropriate, emulated by others around the world. The FASB will collaborate and cooperate with other national standard setters and will participate in and shape the development of IFRS; the GASB will participate in and, through its intellectual leadership, influence the development of international public sector standards.
Building and maintaining trust with stakeholders
We will build trusted relationships with and seek to maintain the support of our stakeholders, who play a critically important role in the independent standard-setting process. We intend to interact with our stakeholders as partners, sharing our thoughts—and seeking theirs—on important financial accounting and reporting issues. Through this type of open communication, we plan to identify and assess stakeholder perceptions of the FAF, the FASB, and the GASB and develop a plan to address any issues that become apparent.
Contributing to the public discourse on current and future financial reporting issues
We will establish ourselves as influential thinkers to help shape and lead the discussion of financial accounting and reporting issues that are of importance to our stakeholders. Successful thought leadership will support our vision of becoming a recognized leader in financial accounting and reporting, and promote our goals of demonstrating a commitment to leadership and building trusted relationships with stakeholders.
So those are the highlights of our draft plan. We hope you’ll take the time to read through the entire document, and share your thoughts with us. And again, let me remind you that we’ve created a special mailbox firstname.lastname@example.org to receive your comments. If you have any questions, please don’t hesitate to send me an email or give me a call. As always, we look forward to hearing from you.
FAF President and Chief Executive Officer