Governance News 1 November 2023

45 minute read (PDF download) 01.11.2023 Mark Standen, Siobhan Doherty, Kate Hilder

This week's issue again has a strong ESG focus. US regulators have finalised principles for climate-related financial risk management for large financial institutions, the IAASB has released FAQs on the application of materiality in proposed ISSA 5000 and the US Chamber of Commerce has reiterated concerns about the SEC's proposed climate disclosure rule. In Australia, the ACT government has moved to legislate a right to a healthy environment. Heading into the Australian AGM season, several companies have already had first 'strikes' against their remuneration reports. On the financial services front, ASIC has released its second report into compliance with the reportable situations regime (REP 775) and more…

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(Re)building trust in UK business: The UK IoD has launched a 'Commission' to develop a Director Code of Conduct

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$19 billion investor coalition pushes Yum! Brands for disclosure of lobbying activity/expenditure
In Brief | Activist group Follow This has criticised Chevron's purchase of oil and gas producer Hess as being at odds with the goals of the Paris Agreement and exposing the company to reputational and (potential) litigation risk

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ACT government to legislate the right to a healthy environment
Global Sustainability Assurance Standard | The IAASB has released FAQs on the application of materiality in proposed ISSA 5000
SEC's proposed climate disclosure rule: US Chamber of commerce reiterates concerns about compliance costs
US regulators finalise principles for climate-related financial risk management for large financial institutions
Greenwashing | The Swiss Department of Finance has announced plans to develop new anti-greenwashing labelling regulations
CEOs issue call on governments ahead of COP28 to address what they see as they key barriers to accelerating private sector climate action
RIAA NZ Aotearoa Collaborative Working Group to promote and advance responsible investing in New Zealand
In Brief | Update on Bills to establish a nature repair market in Australia: The Environment and Communications Legislation Committee has requested an extension of time to report on the Nature Repair Market Bill 2023 (Cth) and the Nature Repair Market (Consequential Amendments) Bill 2023 (Cth) from 1 November 2023 until 18 April 2024 to allow more time to consider the evidence received and to 'conclude its deliberations'
In Brief | ISSB-aligned sustainability reporting: The Brazilian Ministry of Finance and the Comissão de Valores Mobiliários (CVM) have announced plans to incorporate the ISSB sustainability standards into the Brazilian regulatory framework with plans to mandate reporting under the new requirements from 1 January 2026 (with voluntary adoption encouraged from 2024)

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Modernising business communications | New regulations registered
Shareholders 'strike' on pay at Woolworths, APA Group, Tabcorp
Mini pay protest at Boral
Whitehaven AGM: Shareholders deliver first 'strike' at Whitehaven, shareholder climate proposal secures 18% support

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Two financial services companies have been charged with multiple criminal offences over their (alleged) failure to lodge financial accounts with ASIC

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Reportable situations regime | ASIC's second report finds 'little improvement'
Insurers' 2022 flood response: Independent review makes seven recommendations for improvement
APRA responds to consultation on proposed amendments to capital adequacy reporting standard
Financial hardship | ABA launches publicity campaign urging people struggling with loan repayments to contact their bank
Assistant Treasurer recaps the government's focus areas for the super sector
Key takeaways from APRA Chair's opening statement to the Senate Committee
100 individuals fined $430,000+ in H1 2023 over failure to assist registered liquidators
In Brief | APRA has imposed an additional $20 million capital requirement on an insurer following a governance prudential review which revealed 'significant weaknesses in areas of outsourcing controls, conflict management and board decision making'. This will remain in place until the insurers' action plan is completed and 'sustainably embedded'
In Brief | ASIC has launched a public awareness campaign urging retail investors to be 'particularly cautious and aware of the inherent volatility and complexities of market trading'. The campaign coincides with the Australian release of the film Dumb Money – the story of the GameStop short squeeze episode in 2021

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Top Story | Investors' insights for navigating project risks
Top Story | ACMA further raises the Spam Act stakes
US states sue Meta over alleged harm caused to young people by its business practices
Sunburst cyber attack | US SEC has charged SolarWinds and its CISO with fraud, internal control failures
New Principles for AI development and new Code of Conduct welcomed by G7 leaders
In Brief | US President Joe Biden has issued an Executive Order on 'Safe, Secure, and Trustworthy Artificial Intelligence' setting new standards for AI safety and security. Among other things, the Order directs 'developers of the most powerful AI systems to share their safety test results and other critical information with the US government' and establishes standards and best practices for detecting AI-generated content and authenticating official content (in a bid to strengthen protections against AI-enabled fraud/deception)
In Brief | The AICD has released a guidance for directors on how to meet their positive duty obligations in preventing workplace sexual harassment and other harmful conduct including suggested steps to elevate workplace sexual harassment at the board level and suggested questions to put to management