Governance News 11 December 2019

60 mins 10.12.2019 Mark Standen, Siobhan Doherty, Kate Hilder

Governance News provides a weekly wrap up of key governance, regulatory and risk developments in Australia and overseas with a focus on the financial services sector. This week's issue features coverage of the release of ASIC's updated guidance on responsible lending, ASIC's focus areas for 31 December 2019 financial reporting, the release of APRA's Mysuper heatmap, former Commissioner Kenneth Hayne's address to the Centre for Policy Development on the legal obligation to manage/report on climate risk, and the release of a new Davos Manifesto repudiating the shareholder primacy model.

Boards and Directors Navigation Show below Hide below

Is a move to annual elections inevitable? The head of Morrow Sodali has reportedly suggested that the increasing push for 'regular accountability' from investors will see Australia follow the US and the UK in instituting annual director elections

Meetings and proxy advisers Navigation Show below Hide below

What about sell-side research? Writing in the AFR, Ownership matters argues against imposing additional regulation on proxy advisers
United Kingdom | How the FCA will discipline and investigate proxy advisers: The FCA has released a policy statement summarising feedback on changes to the Decision Procedure and Penalties manual and the enforcement guide

Disclosure and reporting Navigation Show below Hide below

ASIC financial reporting focus areas for 31 December 2019

Markets and exchanges Navigation Show below Hide below

In Brief | The Australian Securities and Investments Commission (ASIC) has released a report — ASIC Report 641 An inside look at mining and exploration initial public offers — outlining the findings of a review of the initial public offer (IPO) process for mining and exploration entities in the Australian market. The review of found that companies, directors and lead managers need to implement better practices that take account of the unique characteristics and vulnerabilities of the micro-cap sector

Corporate social responsibility and sustainability Navigation Show below Hide below

Top Story | Stakeholder (not shareholder) capitalism is the only way?
Tackling greenwashing: EU to establish a sustainable investment rulebook specifying what can be marketed as 'green' and what cannot
RIAA study finds that superannuation funds that build responsible investment considerations into their broader investment beliefs and processes financially outperform their peers over one, three and five year timeframes
The next twelve months will be 'critical to mainstreaming sustainable finance' says BoE Governor Mark Carney

Financial Services Navigation Show below Hide below

Top Story | Updated responsible lending guidance released: ASIC aims to clarify expectations
ASIC says its report into timeshare schemes 'has reiterated long-held concerns and provided a deeper understanding of the issues', Consumer group CHOICE has welcomed ASIC's confirmation it will launch a formal investigation
APRA has released its first MySuper heatmap identifying areas for improvement across MySuper products
ABA has called for public views about financial institutions allowing credit cards to be used for gambling and the role of banks in addressing these problems
Mandatory Credit Reporting Bill introduced (incorporating financial hardship reporting changes)
The ACCC has authorised the MFAA Code of Practice for two years
Bill to defer education and training standards for existing financial advisers introduced
New Zealand | Planned changes to improve insurance claims handling announced, including 'addressing unfair contract terms
In Brief | The AFR reports that a report from the Attorney General's department has identified that Enterprise agreement restrictions are locking 13,974 workers into 'mostly underperforming' industry superannuation funds even if the workers already had a different fund
In Brief | Senate Jane Hume has announced the appointment of Will Hamilton as a part-time Director to the Financial Adviser Standards and Ethics Authority (FASEA) commencing 9 December 2019. Mr Hamilton is joined on the Board by the Chair, Catherine Walter, Mark Brimble, Simon Longstaff, Carolyn Bond, Elissa Freeman, Deborah Kent, Louise Lakomy, and Catriona Lowe
In Brief | The Australian Business Growth Fund Bill 2019 (Bill) was introduced into the House of Representatives on 5 December. The Bill proposes to implement the government's commitment to increase the availability of capital for small and medium enterprises by authorising the contribution of $100 million to invest in an Australian Business Growth Fund. Separately, APRA has written to ADIs outlining the regulatory capital treatment of ADI's equity investments in the government's Business Growth Fund

Risk management Navigation Show below Hide below

'Learned helplessness' and 'short-termism' are no excuse? It's clear that climate change posts a material and measurable risk, and directors and firms that fail to take this into account, do so at their own risk says Kenneth Hayne
Regulator raises concerns about Wells Fargo's management of non-financial risk?