From the President’s Desk
The Role of the FAF Trustees
On one hand, the Trustees are charged with protecting and promoting the independence of the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB), insulating them from the influence of politics and special interests. At the same time, the Trustees are responsible for ensuring that the FASB and GASB remain accountable to all of their many and varied stakeholders.
That sets a high bar for the qualifications of each Trustee individually—and for the Board as a whole. By that I mean that, taken together, the Trustees must not only reflect, but deeply understand and appreciate the concerns of all those who participate in our capital markets, whether they are investors, preparers, auditors, regulators, citizens, taxpayers, or among the many others who have an important stake in high-quality financial reporting.
We strive to appoint Trustees who come from varied backgrounds and whose experience has been broad and diverse. An individual Trustee rarely comes to the table with a singular perspective.I often describe our Board of Trustees as a microcosm of those who are served by the FAF, FASB, and GASB. That means that our Trustees collectively should have backgrounds and experience that mirror those of all of our diverse stakeholders. That is a common theme that runs not only through the Trustees, but throughout our organization.
We look for Trustees who are highly regarded within their profession, have an understanding of the U.S. and global financial and capital markets, and strongly appreciate the importance to the markets, investors, and the public at large of independent standard setting for financial accounting and reporting. We strive to appoint Trustees who come from varied backgrounds and whose experience has been broad and diverse. An individual Trustee rarely comes to the table with a singular perspective.
Consider our state and local governmental Trustees, who have spent their careers in public service, primarily as preparers or auditors of governmental financial statements. Frequently, though, those Trustees also had oversight responsibility for the management of billions of dollars of investments in state pension and college funds, meaning that they also are significant users of financial statements of private sector organizations.
With the appointments of the six new Trustees—including a new chair—announced this month, I believe that the FAF continues to honor the tradition of selecting Trustees who have wide and varied experience.
The 2016 Board of Trustees, which officially begins its service on January 1, is among the most diverse—in terms of background and experience—in the history of the FAF. Five of the 18 members who will serve on the 2016 Board have long experience as investors. Four have backgrounds primarily as financial statement preparers, while three have spent most of their careers in the public accounting profession. Three come from the ranks of state and local government officials. Two have been financial regulators. One is an academic.
[Click here for a complete list of Trustees and their backgrounds.]
The new FAF chair, Charles H. Noski, is a good example of that diversity of experience.
Chuck has served as chief financial officer, audit committee chair, and in other senior executive and governance roles at major U.S. corporations. He retired as vice chairman of Bank of America Corporation in 2012, having joined in 2010 following the onset of the financial crisis. Earlier in his career, he was vice president and chief financial officer of Northrop Grumman Corporation, a senior advisor at Blackstone Group L.P., chief financial officer of AT&T Corporation, executive vice president and chief financial officer of United Technologies Corporation, and president and chief operating officer of Hughes Electronics Corporation. That might lead many people to conclude that Chuck brings only the preparer perspective to the table. But Chuck started his career with Deloitte & Touche LLP in 1973, and spent seven years as an audit partner.
Currently, Chuck is a member of the board of directors and chair of the audit committees of Microsoft Corporation and Avon Products, Inc., and a director of The Priceline Group Inc., and the National Association of Corporate Directors. Previously, he served on the boards of directors of Air Products & Chemicals, Inc., Automatic Data Processing, Inc., Avery Dennison Corporation, and Morgan Stanley.
While Chuck has served as an auditor and as a preparer of financial statements, in his roles as audit committee chair and board member he has maintained a keen focus on the interests and concerns of investors. The FAF is fortunate to have a new leader whose experience has touched so many of our stakeholders.
In addition to Chuck, our other new Trustees are:
- Charles M. Allen, a partner and vice chairman with Crowe Horwath LLP, who also has served on the board of directors of the Center for Audit Quality.
- Christine M. Cumming, retired first vice president and chief operating officer of the Federal Reserve Bank of New York. During her time at the New York Fed, Ms. Cumming served as a member of the Management Committee, led the development of a comprehensive risk management program, and oversaw investment management of the bank’s retirement and 401(k) plans.
- Eugene Flood, Jr., a member of the board of directors of Janus Capital Group, Inc., and a former board member of other major asset management firms, including TIAA-CREF. He also served as chief executive officer of Smith Breeden Associates, Inc., a fixed income asset manager.
- Kenneth B. Robinson, former chief audit executive and global risk and compliance leader of the Procter & Gamble Company, where he leads the company’s global internal audit and global enterprise risk, ethics, and compliance functions.
- Diane M. Rubin, retired audit partner and quality control partner of Novogradac & Company LLP. Novogradac works extensively in the affordable housing, community development and renewable energy fields, providing tax, accounting, audit, and valuation services.
Members of the FAF’s Board of Trustees turn over each and every year. As the new Trustees join our incumbent Trustees in January, one thing that will not change is their unequivocal support for independent standard setting, and their recognition of the importance of those standards to the investors, lenders, and citizens who need comparable, transparent, and representationally faithful information from financial reports.
Balancing the needs and interests of many capital market participants is no easy task. But the standard setting process—and governance of that process—succeeds only when those who use or apply our standards are part of it.
I hope you will join me in welcoming our new Trustees. As always, I invite you to share with me your comments and suggestions on this or other issues related to the FAF and its standard-setting boards.
FAF President and Chief Executive Officer