Recommendations

Normally I start with a summary, but in this case I think I’d better start with the recommendations. There are potentially major changes being proposed to the bylaws of XII (XBRL International). XII governance already is opaque and designed to protect vested interests. Are the members apathetic, or does the system work to limit their participation, or both?

1.         The ISC should ensure that all meetings are announced (some recent meetings were not announced, so observers could not attend), and all F2F meetings should also be held on open conference call lines. I know this has been done, and hopefully will remain the practice.

2.         Members of the XBRL community should attend, even as observers, the ISC meetings. This is your organization regardless of what cabals actually run it.

3.         There will be significant changes to the XII bylaws. Talk to your jurisdiction representatives and ask them how they will be voting on the proposed changes to the bylaws, and are there any changes that concern them.

4.         The Bylaws should be changed to ensure that a certain number of At-Large Member seats are directly elected by the members, not by a self-selection and perpetuation of the gene pool.

5.         A huge amount of progress is being made across the world in the adoption of XBRL – why do we hide our light under a bushel? I would love to see even more publicity from the ISC on successes.

Summary

On December 17, the announcement of the December 22nd ISC (International Steering Committee) meeting was sent to the XBRL International e-mail list. All members were invited to listen to the meeting. Not surprisingly, there were very few observers - 2 in fact. XBRL (eXtensible Business Reporting Language) is both a standard and an organization. The organization defines the standard, so the deliberations of the organization should be of critical importance to members, especially those that will be implementing the standard.

Not surprisingly, leadership of such an organization likes to keep control fairly close, and modestly opaque. After all, just under half of the ISC members are At-Large Members, and At-Large Members are the only people who can select At-Large Members.

In addition, proposed bylaw changes will allow the ISC to terminate memberships “for failure to satisfy its Membership Obligations or for engaging in any conduct, either within or without the Corporation, that is contrary to the interests of the Corporation or to the advancement of the Corporation’s business or industry goals.” I wonder if that includes writing anything unflattering about XBRL?

So I highly recommend that you attend, as an observer, the ISC meetings. I recommend this to all members of XBRL in all countries, employees of companies that are members of XBRL in any jurisdiction.  Unfortunately XII remains, and will remain, captive to special interests. But as long as member actually do insist on attending the meetings, even as observers, at least the actual workings and priority settings of XII will become less opaque. Maybe.

The ISC and the At-Large Members

The ISC is the government body of XBRL International. Or is the Board of Directors the governing body of XBRL International? More on that a bit later.

The International Steering Committee was established when XBRL reached a size that meant it could no longer be managed directly out of the AICPA in New York – and when international member countries (Jurisdictions – although there are some Jurisdictions that are not countries) needed a forum for representation in the leadership and direction of XBRL. Each jurisdiction would have a seat on the Steering Committee. Of course non-jurisdiction interests needed to be considered (and protected), so At-Large Members were created, otherwise how could the AICPA, the Big-4 and Friends retain control?

Also enshrined in the earlier bylaws of XII was the idea that the number of At-Large Members would grow at pace with the number of jurisdictions, thus ensuring that the jurisdictions could not, except in exceptional circumstances, override the wishes of the At-Large Members and their constituencies.

Thus we have a situation in which there are 19 Jurisdiction Members, and 16 At-Large Members. And since many of the Jurisdiction Members actually work for Big-4 firms or Friends, the vested interests of the At-Large Members cannot seriously be challenged.

“But”, you say, “I thought the ‘election’ of At-Large Members would ensure that such vested interests are curtailed?” Well, no. You see, the At-Large Members are the only ones who get to vote on who will be an At-Large Member, thus ensuring that only those supportive of their vested interests will ever become At-large Members. This ensures that:

1.         the ISC is stocked with the best fish in terms of their knowledge of XBRL and each other, and

2.         the ISC is stocked with the best fish who all know how to swim together in the same direction.

Having the At-Large Members select those who will join their ranks results in a narrowing of the gene pool. This is not good for XBRL International, and is not good for the standard. It results in a closed and tightly knit group of mutually supporting individuals, limits the range of innovative ideas, and simply put acts to exclude those who do not agree with the existing At-Large Members. It is a shame that a decade into the standard, the ISC is once again chaired by the very first ISC chairman. Mike Willis is a fantastic chair and advocate for XBRL, and his re-election is an affirmation of his vision and the value that he brings. But it also says plenty about just how far reaching the organization has NOT become. New blood is needed.

Bylaw Changes coming

The bylaws of XRL International are under review.

Many of the proposed changes are sorely needed, if for no other reason than to fix contradictions and redundancy in the existing bylaws.

Bylaws are horrible things. They are long documents with pages upon pages of frequently uninteresting detail, with very interesting and important phrases buried deep within. Bylaws reviews are also horrible processes. Someone (usually someone-s) has to read through the existing, note the problems, and attempt to draft solutions.

But changing bylaws also provides the opportunity to slip fundamental changes into the foundation documents of an organization.

The current proposed changes include wording that will allow the ISC, at a simple majority vote, to terminate any member for “for failure to satisfy its Membership Obligations or for engaging in any conduct, either within or without the Corporation, that is contrary to the interests of the Corporation or to the advancement of the Corporation’s business or industry goals.”  Simply put (and in theory) the ISC could terminate a jurisdiction for deciding to hold a local conference at the same time as an international conference (“contrary to the interest of the Corporation”) or, and here it is a bit fuzzy as “Member” is interestingly defined, terminate the membership of any organization that does not follow the party-line.  Does it apply to individual companies that are members of an XBRL Jurisdiction? If so, can the ISC terminate a company for holding views not in alignment with those of the ISC?

It is little changes like that, buried deep in boring documents like bylaws, that slip through and become part of the law of the corporation.

On a completely side note, the role of the Board of Directors in relationship with the ISC seems to be circuitous at best. The Board approves, on recommendation of the ISC (“the ratification of the annual budget submitted by the Board of Directors”, and “The Board of Directors, with input from the Steering Committee” being two examples). In the end, I’m not 100% certain who actually runs XII any longer.

Of course, the Best Practices Board (BPB) and the XBRL Standards Board (XSB) are responsible to the Board, not to the ISC, even though they provide reports at ISC meetings. So, it looks like the ISC (and the Jurisdictions in particular) have no say in determining the priorities of the XSB. It was this type of failure to listen to the needs of the jurisdictions (or as was said to me “the dominance and unwillingness of the Anglo-Saxons to listen to anyone”) that directly led to the creation of XBRL-EU as a jurisdiction – to enable them to have a single voice and to press for their priorities. I expect the jury is still out on that.

Highlights from the ISC meeting

This past ISC meeting had some very interesting reports and discussion. I think the best news was the report by Yossef Newman of Deloitte, the chair of the Taxonomy Recognition Task Force (TRTF), of the significant number of new taxonomies coming through the taxonomy recognition process.  Clearly the number of applications of XBRL around the world is taking off. I did not write down the details, but wish I had so that I could share them with you. There were also reports from the reporting process working group, which has a new chairman, and from the Standards Board, which also has a new chairman to be announced in the new year. Also of note was discussion of the Academic Advisory Committee.

Administrative matters were of course dealt with by Tony Fragnito, the CEO of XII. One item was the acknowledged need to revamp the XBRL website, and to move from a proprietary content management environment to a commercially available environment. Jan Pasmooij of the Royal Nivra in the Netherlands made the suggestion that the AICPA be approached, as they have invested heavily in their web capability.

Of course there was the perennial problem of ensuring that there was actually a quorum, which given that it was 22nd December, that is not a surprise.