UKEB five years in: ‘we’re blessed – investors are engaged’

Introducing UKEB

The United Kingdom Endorsement Board (UKEB) was established in trying times for the UK economy; stuck at a standstill because of the global pandemic, and disentangling itself from EU processes post-Brexit.

Established in 2021 to create a new, post-Brexit endorsement mechanism for the UK, the body influences the development, and considers the adoption for use in the UK, of new or amended standards issued by the International Accounting Standards Board (IASB), part of the International Financial Reporting Standards (IFRS) Foundation. Its remit is to ensure that the interests of UK companies and investors are adequately represented within any new or revised international accounting standards.

The board has been involved in the adoption of three full new standards to date: IFRS 17 Insurance Contracts; IFRS 18 Presentation and Disclosure of Financial Statements; and IFRS 19 Subsidiaries without Public Accountability. IFRS 17 became mandatory for reporting periods beginning on or after 1 January 2023, with IFRS 18 and 19 becoming mandatory from 1st January 2027.

Throughout its brief history, Paul Lee, current Chair and one of only three remaining founding board members, has been present as the UKEB was established as an organisation with a statutory obligation to represent the interests of Britain’s capital markets – its investors, businesses and other stakeholders – on the global stage.

Bringing an ‘investor mindset’ to the board

Lee, appointed chair by the Secretary of State for Business in April 2025, started as Chair in September, succeeding Pauline Wallace. He brought one particular strength to the UKEB table that appears to have served him well from the get-go: he’s an investor himself. Lee is a former head of corporate governance at Aberdeen Asset Management and as a former Director at Hermes Equity Ownership Services, has extensive experience representing the investment community to companies, regulators and parliament.

“I bring that into every conversation, and make sure that the investor's voice is heard at the international standard setting table which, certainly for many national standard setters, doesn't come naturally,” he says.

Standard setters often struggle to get investors engaged in discussions around new or amended standards, he adds. “We're blessed in the UK, having had a bit of a tradition now of investors genuinely engaging in standard setting, and I guess, I've been part of that process for the last 20-odd years, being involved in discussions at the Corporate Reporting Users’ Forum and also at the CFA [Society of the] UK.”

In fact, the UKEB currently has three investors on the board, something that Lee warrants other national standards setters are envious of.

Through collaborating with other investors and having “made the silly mistakes” within safe environments, Lee says he has learned how to speak the right language while engaging in the standard-setting process, “making it feel quite natural” to join the Board.

Assessing success over five years

Lee is clear-eyed about UKEB’s accomplishments over the five years of its existence. A foundational one for him is its access and status within the formal and informal global networks that have coalesced around the IASB.

He goes as far as to suggest that UKEB is now recognised as one of the leading national standard-setters, and given that the board was built “from scratch” within a very short timeframe, this was no small achievement. He pays particular tribute for this to his predecessor as chair, Pauline Wallace.

“Establishing ourselves effectively was really important, and we shouldn't take that for granted,” he says, reflecting on the changes to Britain’s sphere of influence on the international stage post-Brexit.

He adds: “I think, being in this space, our role as a major global market, and just making sure that we have been heard and are engaged in all the debates that are going on, is crucially important.”

An even bigger win for Lee and the board is how it has established itself in the research space around creating standards. “That's been an area where we've done a lot of really interesting work: much less about endorsement, much more about influence getting engaged in the research space, so that we're influencing upstream, because by the time we get a final standard, there's very little you can do.”

He points to UKEB’s research into cost-benefit analysis of adopting and implementing international accounting standards and the cost of capital, as having contributed to international debate on assessing the impact of new standards.

Lee is also “really excited” about intangibles as an upcoming area for setting standards, in which he says the IASB has given an early indication of its thinking. “I highlight all of this work partly because it’s all quite live and recent, where it really does feel like the IASB has listened to at least some of the things we've said and is moving in a really positive direction.”

Stakeholder-led advisory groups extend UKEB’s influence

As an investor himself, Lee is a huge advocate for the merits of openness in the standard-setting process, bringing a whole variety of stakeholders into the UKEB fold. One of the most critical things that UKEB has developed over the past five years, he adds, is the advisory groups, designed to bring a range of stakeholder input to the table.

“Not only do we have the stakeholders directly represented within the board, but we also reach out through those advisory groups to the major communities – investors, preparers, academics, [accounting] firms and professional bodies,” he says.

Lee tries to attend as many of the advisory group meetings as he possibly can. The meetings are really valuable sources of information from people at the coal face, he says. “Being able to take the messages that we hear from those groups directly into the international community is really powerful. And again, we are blessed in the UK that we have stakeholders that are willing to engage. In talking to some of our peers, I find that I should not take that for granted.”

These advisory groups are going through a refresh – Lee believes that it’s important to keep a regular churn of people feeding into UKEB, to encourage diversity of thought – and he is excited by the quality of the applicants that are putting themselves forward to feed into the standard-setting process. “That, I think, is a sign that we're doing something right and that people feel it’s worth their time.”

Beyond the advisory groups, UKEB encourages more informal collaboration and input from stakeholders. For example, UKEB and ICAEW held an event on accounting for intangibles in 2025, which allowed members to feed into the discussion in ways they previously may not have been able to.

The UK, in Lee’s opinion, produces the best annual reports in the world. “We shouldn’t be shy about celebrating that. Intelligence and judgement are built into how we report. People think about materiality and what is material to investor decision-making across all reporting.

“We can be more discerning in how we report and the amount we report, but we’re reporting that materiality judgement well, in a way that shows significant difference in UK reporting compared to other jurisdictions.I see there being less tension and less challenge than others do, as long as people have the confidence to apply a materiality judgement to what they’re reporting.”

Current priorities and challenges?

The biggest challenge for UKEB to date is IFRS 20, which covers regulatory assets and regulatory liabilities. The standard aims to address disparities between when the provision of regulated goods and services is reported, and when those goods and services are charged for.

The IASB favoured an approach that tests for line-by-line ‘direct’ relationships between a corporation’s regulatory capital account and its property, plant and equipment (PPE).

UKEB preferred a ‘big picture’ top-down approach that instead accounts for the ‘total variance’ between the total value of a company as determined by the regulator and the net book value assigned to assets on the company’s balance sheet.

Lee describes the divergence of opinion as “quite a bruising experience, having to push the boundaries of our positive relationship with the IASB to get towards a standard that we felt worked better for the UK.”

He stresses that UKEB is “encouraged” by what it has seen of the new standard so far, but points out that it is still “very early days.”

“It’s been a real challenge and learning experience for us. Which is why I want us to be more direct in our communications, and to be as early in our inputs as we can. I don’t want us to get into that situation again.”

The UKEB’s work on endorsing the standard will commence this month, Lee says, with a launch paper presented to the board in June, triggering the project initiation plan. “We've got a lot of analysis to do, a lot of understanding of the sector implications for the standard, and actually thinking about the economic impact in the long term is going to be a substantial bit of work. We have to put the document out for public consultation, then come back and reach our final decision, so there’s a process for us to go through. Around 18 months is a realistic timeframe.”

Alongside this, UKEB will be conducting a post-implementation review of IFRS 17 Insurance Contracts. “We have to do this under our statute, within five years of implementing a standard that had a significant effect on accounting practice, and clearly that was true of IFRS 17. We're moving ahead of where the IASB is, because, as I understand it, there are a number of major markets that haven't implemented it yet. So we are in a slightly odd position where the timing doesn't quite join up.”

UKEB will also contribute to the IASB review, but it’s important for the setter to determine what a review looks like for the UK, Lee says. “I think the ambition from this project is to find out if it's working, if there are problems that we can identify some solutions to, and then to feed those insights into the IASB process and perhaps help them to think about amendments, should that be necessary. It does give us an opportunity to influence in that way.”

UKEB and its chair appear resolute in their quest to represent British interests in the realm of international accounting standards. As Lee sees it, the board could be “more direct” in its communications with IASB, moving away from what he calls “a British diffidence” and a politeness that often masks intent. That also is reflected in the sense of openness, in wanting to hear from stakeholders.

“Making sure that we keep the energy and quality of the debate going, and that we are heard, is really crucial.”