• First strike 'expected' at Telstra AGM? According to media reports, Telstra is reportedly 'expecting a material vote' against its remuneration report after proxy advisers Glass Lewis, ISS and Ownership Matters issued recommendations against it, ahead of the 16 October AGM.  
• Proxy advisers reportedly raised concerns about 'excessive' CEO pay at Transurban ahead of the AGM, but nevertheless advised investors to support the remuneration report (which was subsequently approved).

Overseas developments

• United Kingdom | Compulsory ethnicity pay reporting for UK employers? The UK government has issued a consultation paper seeking views on how ethnicity pay reporting could be implemented as a means of helping to address the disparities between the career prospects and salaries of minorities.

• In Brief | Change in approach? Governance issues are now a key concerns for Elliott Management according to The WSJ, which reports that Elliott has shifted away from its traditionally 'aggressive' engagement style, to focus instead on building long-term relationships in line with shifting shareholder expectations.
• In Brief | Unilever has reportedly abandoned plans to collapse its dual listed structure into a single Dutch entity under pressure from UK shareholders.  The primary reason for their opposition was reportedly the fact that unification would require Unilever to surrender its FTSE100 listing.  The AFR suggests that given the same shareholders who opposed the Unilever unification plan are also 'major owners' in BHP, it may signal the end of Elliott's push to end BHP's dual listing.  

• In Brief | 'Fearful' of confronting boards on ESG issues or merely preferring to engage privately? An ACCR survey has found that some of Australia's largest funds are less than active when it comes to supporting ESG governance reforms (considered by ACCR) to be in the best long-term interests of shareholders.  Overall, the report found that though some funds 'assert' themselves at AGMs, many superannuation funds appear 'fearful of confronting company boards and management on policy issues significant to the long-term interests of beneficiaries'.  

• China | Revised Chinese Corporate Governance Code released: Glass Lewis comments that new requirements for listed companies to establish party organisations mean that overseas investors 'should be mindful' of Chinese government involvement, and the potential for conflicts between the interests of the Party and other stakeholders. 

• ISS 2018 Governance Principles Survey results released: Shareholders were asked to comment on the issues of auditor independence, director accountability and track records, board gender diversity and the 'one share, one vote principle' to inform the ISS policy process, ahead of the release of ISS policies in November.

Climate Disclosure

• CalPERs is among the supporters of a petition for the US SEC to 'promptly initiate rulemaking to develop mandatory rules for public companies to disclose high-quality, comparable, decision-useful environmental, social, and governance information'.
• Progress update one year on from the release of the TCFD recommendations: The TCFD recommendations have been adopted by 457 companies globally, but there is room for improvement on reporting practices the Taskforce states.  

• Top Story | APRA to reconsider its approach to enforcement? In the wake of the release of the Financial Services Royal Commission’s Interim Report, APRA Chair Wayne Byres has called on industry to raise standards of professionalism and has also signalled that APRA will also reconsider its regulatory approach.  
• Update on professional standards for financial advisers: ASIC has released an instrument delaying reporting dates and making minor amendments
• Short selling changes: Following consultation, ASIC has released a new legislative instrument and updated guidance on short selling
• In Brief | The Reserve Bank of Australia has identified bank culture among the 'vulnerabilities for Australian financial stability' in its latest half-yearly Financial Stability Review, noting that to date the impact of these failings has been small but that 'the consequences of reputational damage could impair banks’ profitability and resilience'.  The report also states that 'bank culture needs strengthening'.  
• In Brief  | SEC has released its Strategic Plan for FY 2018 through FY 2022: Chair Jay Clayton writes that 'The SEC’s long-standing tripartite mission—to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation—remains our touchstone' and unchanged.  Among the goals/priorities identified in plan are a focus on pursuit of misconduct impacting retail investors modernising design, delivery and content of disclosure; involving investors in rule-making; and a focus on cyber risk and preparedness.  

Fee for no service (FFNS) Developments

• Australian Banking Association to amend the Banking Code to end FFNS and support changes to FoFA legislation to end grandfathered payments/trail commissions to financial advisers.
• ASIC has announced a review of possible 'systemic non-compliance' with requirements for Fee Disclosure Statements and Renewal Notices in the financial advice sector and flagged that it is currently investigating 'substantial breaches' of these obligations with a view to taking enforcement action.

Other Developments

• Progress update implementation of APRA culture review recommendations | CBA has released independent monitor, Promontory Australasia’s, first quarterly report into the progress of CBA’s Remedial Action Plan to address all 35 of the recommendations of APRA's Prudential Inquiry.
• House economics standing committee public hearings: CEOs of the big four banks have been/will be required to answer questions on remuneration and their response to issues raised by the Financial Services Royal Commission.  
• In Brief | Estimated financial impact of remediation: The AFR reports that Morgan Stanley has predicted that ANZ, CBA, NAB and Westpac will repay customers an estimated $2bn in 2018/2019.  
• In Brief | CCIV update: The government has released Tranche 3 of the Treasury Laws Amendment (Corporate Collective Investment Vehicle) Bill 2018  CCIV for consultation.  This exposure draft includes draft provisions relating to depositary independence, external administration, takeovers, compulsory buy-outs and acquisitions, disclosure and fundraising, the Asia Region Funds Passport (ARFP), and other miscellaneous amendments (such as amendments to the Australian Securities and Investments Commission Act 2001 (ASIC Act)).  Consultation closes 26 October.

Recent UK developments

• Top Story | More reviews of UK audit sector: CMA to review the UK audit sector; FRC to continue with planned program of reviews 
• BlackRock supportive of FRC's current approach? The FT reports that BlackRock has called for more power and resourcing to be given to the UK FRC.   

Cybersecurity

• Google's failure to immediately report a cyber issue has 'raised eyebrows'? Google knew of a security flaw that exposed the private data of Google Plus users to third parties in March, but elected not to disclose the issue until October.  Media reports have queried the delay and suggested that it has heightened the negative impact of the issue on the company.
• Is SEC toughening its stance on cybersecurity issues? SEC has announced the first enforcement action charging violations of the Identity Theft Red Flags Rule.  
• In Brief | Human error identified as the cause of the majority of cyber breaches: The Canberra Times reports that OAIC Acting Deputy Commissioner Andrew Solomon has said that eight months into the mandatory notifiable data breach scheme, it is clear businesses should focus on addressing the 'human element' of data breaches given in excess of one third of breaches over the last quarter were the result of simple human mistakes. 

Climate Risk

• 2C isn't enough?  UN commissioned IPCC Climate report has found limiting temperature increase to 1.5C is significantly better in terms of outcomes than the 2C scenario but that 'drastic' change is needed to meet the target and limit the detrimental impact of rising temperatures.

Other Developments

• In Brief | How should boards prepare for future crises? Is crisis preparation necessary?  EY board matters argues that advance crisis preparation 'is now imperative' for companies, and for boards, given the virtual impossibility of total avoidance and have outlined a number of suggested steps for boards to take. 
• In Brief | Compulsory reading for every board: Co-author of the Final Report into culture at CBA, Professor Graeme Samuel has called on all companies to 'distribute it to the board, all senior executives and maybe even middle management' to assess operations against the 35 recommendations in the report.  Professor Samuel has also called on companies to undertake any assessment internally with minimal involvement by consultants in order to 'own' the change. 
• In Brief | UNSW has appointed Professor Dimity Kingsford Smith as the inaugural MinterEllison chair in risk and regulation. MinterEllison partner Ross Freeman said that connecting academic inquiry to leading professional practice is critically important to the financial services industry in Australia. MinterEllison partner Rahoul Chowdry said: 'The industry is going through the most profound changes we are likely to see in our lifetime. As advisers to the industry we have a particular interest in supporting sound risk management, regulation and legislation that benefits society and the economy more widely'.  

• MinterEllison update: Terms of Reference released - Royal Commission into Aged Care Quality and Safety.