Insurance Europe has today published its response to a consultation conducted by the European Financial Reporting Advisory Group (EFRAG) on the ad personam mandate on the potential need for changes to its governance and funding.
European insurers support the overall approach proposed in the consultation paper of having two pillars within EFRAG: ie one dedicated to financial reporting and another dedicated to non-financial reporting. The future EFRAG board should have an overarching role, with oversight of both pillars.
Funding should come primarily from the European Commission, given that non-financial reporting is for the wider public good. However, in terms of governance and expert input, the non-financial reporting pillar should consider how it can replicate a public-private partnership such as is the case for the financial reporting pillar, where EFRAG has been very successful in working with and leveraging the private sector’s expertise.
The private sector should play a key role in the standard setting work and representation should be equivalent to what currently exists for dealing with financial reporting matters: ie representation at board, technical expert group and working group levels.
While Europe must continue to work to develop non-financial reporting standards, over time a global approach is expected and desired. The future Non-Financial Reporting Board should therefore be given a mandate to both consider global developments and to pro-actively seek to influence them to achieve alignment with what is being developed in the EU.