It's rare that I actually feel saddened by a post but I am a bit shocked and saddened [once again, see disclaimer on the right side of this blog] to see that FASB Chairman Robert Herz has announced he is taking early retirement as of Oct. 1, 2010. FASB Board Member Leslie Seidman will fill the role of Acting Chair until a replacement board member and a chair among those board members is chosen. Herz' term was originally to last until June 30, 2012.
FAF To Return FASB Board To Seven Members From Five
Separately, the Financial Accounting Foundation (which oversees FASB) also announced that the size of the FASB board will return to seven members, thus reversing the decision made by the FAF a few years ago in which they decreased the size of the FASB board to five members. I personally [please note again the disclaimer on the right side of this blog] had discomfort with the decision to reduce the size of the board and the way it was handled, as noted in my June 25, 2009 blog post "FASB and Due Process." Since the majority of comment letters filed when the proposed reduction in size of the board were against the reduction, I personally anticipate most of FASB's constituents will be pleased with this decision to bring the board back to seven members. FEI's Committee on Corporate Reporting and Committee on Private Company Standards were among those who filed comment letters in Feb. 2008 opposing the then-proposed reduction in size of the FASB board.
Here is a statement issued by SEC Chairman Mary Schapiro in response to FASB's announcement.
My Two Cents
I remind you again of the disclaimer on the right side of this blog...I'm sure speculation will abound as to Herz' decision to retire early. In my view, e.g. through listening to webcasts, particularly of the joint IASB-FASB Financial Crisis Advisory Group that met a couple of years ago, and the goings-on relating to Congressional hearings on fair value, and threats to FASB's independence during drafting of the Dodd-Frank Financial Reform Bill, I felt that Herz (and the boards in general) were under a great deal of pressure, as noted here, and that Herz may have found some of his own views evolving over time on the issue of fair value, perhaps from further consideration, perhaps from wider outreach and perhaps a wider definition of 'investors,' as noted here and here.
I choose at this time not to over-speculate, but simply to wish Mr. Herz, Ms. Seidman and the entire board well during this transition. I truly believe that being a FASB board member must be one of the most difficult jobs in the world, including because, to a large extent, the world rests on their shoulders, and I give all the board and staff members credit for dedicating themselves to that.
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