The Securities and Exchange Commission has appointed William D. Duhnke III as the new chairman of the Public Company Accounting Oversight Board, and named four new members to replace the PCAOB’s current board.
The new board members are J. Robert Brown, Kathleen M. Hamm, James G. Kaiser, and Duane M. DesParte.
Duhnke’s appointment had been widely rumored this year (see GOP aide is said to snag $670,000-a-year job chairing PCAOB). There was even talk in 2015 about him being under consideration (see SEC chair faces conflict of interest claims in choosing next PCAOB head). He is currently the staff director and general counsel to the U.S. Senate Committee on Rules and Administration. He was previously the staff director and general counsel to the U.S. Senate Committee on Banking, Housing and Urban Affairs and the Committee on Appropriations. Before joining the Senate staff, Duhnke was in the U.S. Navy, and served on the the Commission on the Assignment of Women in the Armed Forces.
People familiar with the situation expect that Duhnke, a former staff member with Alabama GOP Sen. Richard Shelby, will push the board in the anti-regulatory direction of the Trump administration.
He will be succeeding PCAOB Chairman James Doty, who has been chairing the PCAOB since 2011. “The PCAOB has an important mission, and highly competent, hard-working and dedicated people," said Doty. "It has been a great privilege to lead them in the service of the investing public.”
Of the other four new members, Brown is currently a professor of law at the University of Denver, where he runs the Corporate and Commercial Law program. Before beginning his teaching career 25 years ago, he served on the staff of the SEC and worked in private practice.
Hamm is global leader of securities and fintech solutions and senior strategic advisor on cyber-solutions at Promontory Financial Group. She previously worked at the Treasury Department, the American Stock Exchange, and the SEC.
Kaiser is a partner and the global assurance methodology and transformation leader at PricewaterhouseCoopers, where he leads the Big Four firm’s auditing innovation efforts, and is also responsible for its adherence to international auditing standards. He has been with the firm for 38 years and held a number of leadership roles at the firm.
DesParte will soon retire as senior vice president and corporate controller of the Chicago-based energy company Exelon Corp, where he has worked for the past 14 years. He previously was an audit partner at Deloitte & Touche and before that at Arthur Andersen.
They will be succeeding PCAOB board members Steven Harris, Lewis Ferguson and Jeanette Franzel. Harris has been on the board since 2008, Ferguson since 2011, and Franzel since 2012.
“Bill [Duhnke] and I overlapped on the Senate Banking Committee," said Harris. "I always found him to be honest, intelligent and experienced, all essential qualifications for a successful chairman. I wish him the very best.”
Franzel and Ferguson looked back at their terms on the board. “It’s been a great honor to serve as a Board Member at the PCAOB to protect investors and the public interest,” said Franzel. “I want to compliment the PCAOB staff in progress they’ve made in driving audit quality during my tenure.”
“It’s been a great honor to be part of this wonderful organization with such an important mission,” said Ferguson. “I wish the new chairman and board members all the success in continuing the important work of the PCAOB.”
The new board members will find the jobs on the PCAOB board pay highly, with the chairman earning $673,000 per year, and the other board members $547,000 per year.
“Bill, Jay, Kathleen, Jim, and Duane bring substantial experience to the board and a shared commitment to serve in the interests of our Main Street investors,” said SEC Chairman Jay Clayton in a statement. “Their individual and collective talents position the PCAOB to execute its mission effectively in our local, national, and international markets. I would like to thank Jim Doty for his excellent leadership in serving as chairman of the board. I also would like to thank Steve Harris, Lew Ferguson and Jeanette Franzel for their dedicated service as members of the board. They have achieved a great deal on behalf of our investors and the public, including, most recently, the adoption of a new auditor's reporting model which should provide investors with meaningful additional insight into auditor-audit committee communications.”
SEC Chief Accountant Wes Bricker added, “We look forward to working with these new board members in connection with furthering the PCAOB's central mission. The new Board members are well-qualified to lead the PCAOB as it carries out its critical role in promoting investor protection and strengthening audit quality."
Clayton pointed to the diversity of the new board members in a separate statement. “I believe that the board members announced today reflect that objective and will bring diversity of perspectives and collaborative decision making to the governance of the PCAOB,” he said. “The new board’s collective experience spans the phases of the financial reporting process, and also includes: senior positions in the executive and legislative branches of government, government investigations, military service, SEC investor advisory committee service, board member service, experience in teaching and writing about corporate and securities laws matters, experience in engaging with investors, demonstrated leadership on cybersecurity and fintech matters, and experience with preparing financial disclosures for both large and smaller reporting companies. A PCAOB board that brings such a wide variety of perspectives to bear through consensus-based decision-making should be able to move forward on effectiveness of standard-setting, robustness in oversight of the audit profession, and global leadership in audit regulation.”
Cindy Fornelli, executive director of the Center for Audit Quality, issued a statement about the new PCAOB members. “The CAQ congratulates incoming PCAOB Chairman William Duhnke, as well as the four other incoming board members," she said. "The PCAOB’s efforts to promote high-quality, independent audits of public companies are crucial to investor confidence and the vitality of our capital markets. Chairman Duhnke will lead a new PCAOB board made up of experts with diverse backgrounds and experience that will help in carrying out its important mission. The CAQ looks forward to serving as a resource to Chairman Duhnke and the PCAOB as part of the public company auditing profession’s commitment to continuous improvement. The CAQ thanks Chairman Jim Doty, and Board Members Steve Harris, Lew Ferguson, and Jeanette Franzel for their service and strong commitment to enhancing audit quality. We wish them the very best in their future endeavors."
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