The Securities and Exchange Commission is cleaning house at the Public Company Accounting Oversight Board, appointing five new board members to take over the reins beginning in January.
The SEC has appointed U.S. Senate staffer William D. Duhnke III as chairman of the PCAOB. Currently, Duhnke is staff director and general counsel to the U.S. Senate Committee on Rules and Administration. He previously served in the same role for Senate committees on banking and appropriations, and he served in the U.S. Navy.
James Kaiser, currently a PwC partner, and Duane M. DesParte, a career auditor employed for the last 14 years on the corporate side with Exelon, will join Duhnke as members of the newly seated PCAOB. Kaiser, who has been with PwC for 38 years, is the firm’s global assurance methodology and transformation leader, where he has led the firm’s effort to drive innovation in auditing. DesParte will soon retire as senior vice president and corporate controller of Exelon. He was an audit partner at Deloitte & Touche, and before that Arthur Andersen, before joining Exelon.
Rounding out the five-member board will be J. Robert Brown, a law professor at the University of Denver, and Kathleen M. Hamm, global leader of securities and fintech solutions and senior strategic advisor on cyber solutions at Promontory Financial Group. Brown currently is director of the corporate and commercial law program, and previously he was on staff at the SEC. Hamm worked previously for the U.S. Treasury, the American Stock Exchange, and the SEC.
Sarbanes-Oxley specifies the board have five members, at least two of whom must be certified public accountants. Beyond that, it is up to the SEC to determine the mix of skills to seat on the board, said SEC Chairman Jay Clayton in a statement accompanying the announcement.
The SEC was largely expected to appoint at least one new member to fill a vacant seat and one more to replace Steve Harris, who is completing his second term. Jeanette Franzel was eligible for re-appointment, and Lewis Ferguson still had two years remaining on his second term at the board.
The appointment of an entire new slate of PCAOB members may signal a new mandate for the board. Clayton said the new board’s experience “spans the phases of the financial reporting process,” with senior positions in the executive and legislative branches of government, government investigations, military service, SEC investor advisory committee service, board member service, teaching and writing about corporate and securities laws matters, engaging with investors, cyber-security and fintech matters, and in the preparation of 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,” said Clayton. The SEC has historically been critical of the PCAOB’s standard-setting process, and the board’s ability to broker arrangements with regulators abroad to inspect overseas firms has been a slow and arduous process.
Departing Chairman James Doty, who has remained in his post in hold-over capacity after his term was not renewed under former SEC Chair Mary Jo White’s tenure, said in a statement “it has been a great privilege” to lead the PCAOB in the service of the investing public.