• Pepsi Co CEO Indra Nooyi has resigned after 12 years as CEO of a Fortune 500 company: Media reports suggest that her departure casts a spotlight on the lack of women in leadership and separately on the emergence of 'key man' risk as a risk and as an investor concern.

• Earning short term bonuses 'like clockwork'?  Transurban CEO Scott Charlton is reportedly set to earn $7m due in the main to a 17% increase in his short term incentive raising questions, The AFR suggests, about the way in which companies set targets.
• In Brief | Pay accountability at CBA: CBA Remuneration Committee Chair Sir David Higgins has prefaced the organisation's latest remuneration report by stating that 'The most senior executives have been held accountable for the Bank's performance over the past year.  This includes former executives'.  He went on to state that 'The total impact for all employees of the operation of the remuneration framework and exercise of Board discretion over the 2017 and 2018 financial years has been a reduction in remuneration outcomes exceeding $100m…In making these decisions, the Committee and Board were determined to address fully, past performance issues identified for former and current Executives, and focus their efforts on becoming a stronger, better bank.' 
• In Brief | Trend towards performance based awards emerging? A new Equilar study examining the mix of compensation provided to CEOs and its correlation to shareholder approval over the past three years has found that companies who receive 'say on pay' approval from their shareholders on executive compensation are shifting pay packages to rely more heavily on performance awards.
• In Brief | The 7 August was Black Women's Equal Pay Day in the US: On average black women make 37 cents less than men (ie for every dollar a man makes, black women make 63 cents) and 21% less than white women Fortune reports. 

• In Brief | ACSI has announced that Christian Super has become a signatory to the Australian Asset Owner Stewardship Code.  ACSI CEO Louise Davidson commented, 'We're seeing a number of asset owners who don't want to wait until next year to begin providing more information about their stewardship activities'.  

Update | Consultation on proposed changes to the ASX Corporate Governance Principles and Recommendations

• Proposed changes to the ASX Principles and Recommendations are as yet in draft and may change in response to feedback on the consultation process: ASX Corporate Governance Council Chair Elizabeth Johnstone has issued a statement in response to recent debate about proposed amendments.  
• ASIC response to the consultation on the draft ASX Corporate Governance Principles and Recommendations: ASIC has suggested an alternate disclosure model and mandatory compliance with 'some or all' of the Principles and Recommendations for larger listed companies.  
• Submissions on proposed changes to the ASX Corporate Governance Principles: A review of the submissions reveals a diversity of views on proposed amendments, including the concept of the 'social licence to operate'. 

Overseas Developments

• Singapore | MAS has published a revised 'streamlined' and 'less prescriptive' Code of Corporate Governance.  
• In Brief | FRC consultation on the Wates Governance Principles for large private companies: In a blogpost on the FRC website, The Institute For Family Business has expressed support for the proposed principles stating that they will help to promote 'good and workable governance in private businesses' while remaining sufficiently flexible.  More particularly, IFB argues non-executive directors potentially add great value to a family business in a number of ways including by bringing an outside perspective, offering constructive challenge and bringing a new set of skills or contacts.  Consultation on the Wates Principles closes 7 September and a final version will be published in December 2018.

• Tesla's unconventional choice of platform (Twitter) to announce CEO Elon Musk's plans to privatise the company as well as its substance and timing has sparked substantial media interest.  Is it a joke, a matter of enabling great focus on long term goals, potential market manipulation or a response to the short seller threat? 
• In Brief | Breach of the Disclosure Guidance and Transparency Rules?  ClientEarth has reportedly filed a complaint with the FCA alleging three insurers' failure to disclose climate risk is a breach of the Disclosure Guidance and Transparency Rules. 

• Top Story | $70.1m in additional funding for ASIC announced to 'embed' ASIC staff in the big four banks and AMP among other measures.
• ASIC's latest enforcement report for H1 2018 released: Highlights include $20.44m in civil penalties and $256.69m in compensation and remediation for investors and consumers.
• Global consultation on the creation of a Global Financial Innovation Network: ASIC and 11 international financial regulators and related organisations are jointly consulting on the proposed creation, role and priorities of a proposed Global Financial Innovation Network (GFIN). 
• 'Banks could do more to manage the risks to customers associated with third party access to money in customers' accounts' according to ASIC Report 584: ASIC's review of fraud/risk controls on third party accounts found no 'widespread misconduct' but five Australian banks will take steps to improve their fraud/risk protections.  
• In Brief | Division of regulatory responsibilities in relation to superannuation entities: In a joint statement, ASIC and APRA have outlined their respective responsibilities with respect to the oversight of RSE Licensees. 'APRA is primarily responsible for ensuring RSE licensees prudently manage their business operations in a manner consistent with their member best interest obligations and the delivery of quality member outcomes; and ASIC is primarily responsible for ensuring RSE licensees meet their conduct obligations in their dealings with consumers, including disclosure and advice to members and ensuring members have access to complaints processes'.  
• In Brief | ASIC's submission in response to the PC Inquiry draft report into superannuation states that ASIC and APRA 'seek to co-operate and co-ordinate their activities as effectively as possible' but argues that both regulators could do with stronger powers.  The submission adds that 'ASIC agrees that there is a significant role for strategic conduct regulation in superannuation, in particular that goes beyond disclosure and addresses misconduct relevant to outcomes' and notes that 'ASIC is currently implementing an enhanced approach to its regulation of superannuation' but that a 'greater conduct regulation role would desirably require law reform'.  
• In Brief | As part of the government's national financial literacy strategy, ASIC has announced the release of five 'Women Talk Money' videos featuring discussion with five well known women on a broad range of money related topics including day to day money management and planning for the future (including superannuation) to 'make women more aware of their finances and encourage them to make better decisions'.  

Overseas Developments

• The IoD has released its response to the Kingman Review on the future of the FRC: The UK Institute of Directors has called for the Financial Reporting Council to spin off its corporate governance arm and focus on its primary role of improving company audits.

• 'Environmental, social, corporate governance and ethics considerations now sit alongside financial as critical components informing the investment decisions of the majority of Australia's professional investors': 55.5% of all assets professionally managed in Australia are now invested as responsible investments according to the latest annual RIAA Benchmark Report 2018. 
• In Brief | The WSJ reports that the US SEC has dropped its investigation into the adequacy of Exxon Mobil's climate change disclosures.  However, investigations by the attorneys general of New York and Massachusetts are reportedly continuing into how Exxon has accounted for the impact of climate change on its assets.   New York investigators have reportedly alleged that Exxon appears to have used internal estimates to account for climate impacts that differed from public statements.  Exxon has reportedly denied those charges and said its statements accurately reflect the 'proxy cost' of carbon it uses in internal estimates.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Financial Services Royal Commission)

• Top Story | Financial Services Royal Commission Round 5 Hearings: Overview of week 1 hearings on superannuation.
• In Brief | Financial sector criminality must be met with criminal charges? In light of recent revelations at the Financial Services Royal Commission, Centre Alliance Senator Rex Patrick has demanded that ASIC commence criminal proceedings where criminality is suspected. 'Charging dead people fees and "taking money to which there was no entitlement" is not a ledger error — it is theft and should be treated as such,' said Senator Patrick. 'There can be no discretion exercised here. The alleged action of banking officials and executives cannot simply be dealt with by a civil penalty levied at a bank who may well treat a fine as a 'cost of doing business'.  Mr Patrick also called on the government to take 'legislative action' to immediately end the payment of 'grandfathered conflicted remuneration'.  

Other Developments

• Fee for no service remediation may rise to $850m according to ASIC's latest update.
• In Brief | The existing broker model is working?  Australian Finance Group's submission in response to the Productivity Commission's final report into competition in the financial system cautions that scrapping broker commissions would be counterproductive.  AFG CEO David Bailey argued that any move to ban trailing commissions for mortgage brokers would have the impact of consolidating the lending base of the banks, cutting competition and driving up prices.
• In Brief | Facebook wants large US banks to share detailed financial information? Facebook has reportedly asked large US banks (JPMorgan Chase, Wells Fargo, Citigroup and US Bancorp) to discuss potential offerings it could host for bank customers on Facebook Messenger.  Alphabet's Google and Amazon.com have also reportedly asked banks to share data if they join with them in order to provide basic banking services on applications such as Google Assistant and Alexa.

• In Brief | Former directors face questioning over Carillion's collapse: The Guardian reports that nearly seven months after Carillion entered liquidation, The Insolvency Service has finished transferring 278 contracts to new suppliers and officials are now expected to devote more time to an investigation into why the company failed, including a closer examination of the role played by former directors.  The inquiry will run alongside two parallel investigations by the FCA and FRC into Carillion's failure.