How the PIOB operates
The PIOB is comprised of 10 members and a secretary general, who coordinates a Secretariat with a staff of 5, headquartered in Madrid. The PIOB Board meets 4 times a year at the end of each quarter: March, June, September and December. Three of the meetings are usually held in Madrid and one abroad, alternating location to achieve wider geographical presence. In addition to abiding by its internal Code of Conduct, the PIOB conducts regular self-assessments to ensure that the performance of the PIOB and its members is always responsive to any area identified for self-improvement.
The PIOB’s mandate is “to increase the confidence of investors and others that the public interest activities of IFAC are properly responsive to the public interest.”1 This mandate originates from the agreement signed in 2003 between the International Federation of Accountants and the Monitoring Group - the 2003 Reform proposals. Effectively, this mandate implies:
(i) to ensure that the processes of standard development under its oversight follow due process and are responsive to the Public interest,
(ii) to ensure the completeness of the strategies and work plans of standard setting boards,
(iii) to oversee the process of nominations to all PIACs and CAGs under its oversight, and
(iv) to oversee the CAP.
The objective of the PIOB is to protect the public interest responsiveness of the processes (standard setting, strategies, nominations, compliance) and structures (PIACs, CAGs, Nominating Committee) through its independent oversight.
PIOB oversight relies mainly on direct observation by PIOB members of the PIAC, CAG, CAP and Nominating Committee meetings. PIOB members attend these meetings in person as observers to assess the public interest responsiveness of deliberations. Observations by Board members are reported to and monitored by the Secretariat, which oversees the standard setting processes. Continuity of the oversight process is assured by staff monitoring and by the quarterly convening of PIOB meetings, when the outcomes of direct observations and other issues are discussed.
PIOB oversight also relies on the reports from IFAC leadership, the chairs of the PIACs, of their CAGs, and on independent staff reviews. Based on all this information, the PIOB forms an opinion on the public interest responsiveness of each stage of the processes under its oversight mandate:.
a) Regarding standard setting, the PIOB mandate is to conduct due process oversight of the three sandard setting boards mentioned above with the aim of ensuring their public interest responsiveness. Public Interest responsiveness is the PIOB´s primary responsibility and respect for due process helps ensure that the public interest is embedded in standard development. Oversight of the standard-setting process, including of the CAGs and the public consultation processes, helps to ensure that international standards are set in a transparent manner with sufficient attention to stakeholder input, which in turn helps to enhance their legitimacy and ensure that they are appropriate and credible.
b) Regarding strategies and work programs, the PIOB is mandated to determine whether strategic plans are complete, in addition to considering whether due process has been followed in their development. Oversight of the strategies and work programs helps to ensure that SSB’s work is focused on the needs of users of accountancy services, appropriately reflecting the public interest. The PIOB has the right to ask that particular projects be included in the plan. The PIOB also approves changes to or extensions of the strategy and work programs.
c) Regarding the process of nominations, to select candidates for SSBs, IFAC Nominating Committee and the CAP, the PIOB mandate includes overseeing the selection process managed by IFAC’s Nominating Committee and approving the recommended appointments to the SSBs, including the Chairs, the IFAC Nominating Committee (excluding its two ex-officio members), and the CAP. The PIOB monitors the annual “Calls for Nominations” and makes recommendations to IFAC regarding issues such as selection criteria or definition of members’ categories, and attends IFAC Nominating Committee meetings as observer through the full nominations cycle. At the end of the year, the IFAC Board submits to the PIOB for approval the list of candidates selected by IFAC’s Nominating Committee to fill the vacancies in SSBs the year after.
Regarding nominations to the CAGs, the PIOB oversees the CAG process to elect its Chair and approves its nomination. It also approves the nomination of new member organizations as well as the appointment of their first representatives. The PIOB oversees the five year evaluation of CAG member organizations conducted by the CAG Chair and approves any recommendations.
Oversight of the nominations process helps to ensure that the persons involved in standard setting collectively bring sufficient technical competence and breadth of perspectives to develop appropriate international standards.
d) Regarding oversight of the CAP, the PIOB mandate is limited to being consulted on its strategy and work program and overseeing the due process followed in the reviews of the SMOs (Statements of Membership Obligations).
In 2011, the PIOB reflected that respect for due process may not always guarantee the public interest Seventh Public Report ). The public consultation carried out by the PIOB in 2012 in coordination with the MG enquired about the nature of PIOB oversight (http://www.ipiob.org/news/public-consultation-public-interest-oversight-board-work-program-2102-and-beyond). Responses suggested that oversight should be focused on protecting the public interest (PIOB Report on Consultation Process March 2013.pdf)2. The PIOB agreed that increasing its oversight capacity might enhance its ability to protect the public interest and agreed that a PIOB observer or the PIOB as a whole may raise an issue of substance if the public interest is considered to be at stake. The PIOB statement following the consultation was issued in March 2013: (http://www.ipiob.org/news/piob-recommendations-response-its-consultation-piob-work-program-2012-and-beyond).
The PIOB is financed by IFAC and a number of contributors. The breakdown of contributions in 2015 was: