Governance News 17 December 2018

• United Kingdom | Ahead of the commencement of the new UK Corporate Governance Code on 1 January the UK Investment Association has issued revised Principles of Remuneration and written to remuneration committee chairs to flag specific areas of investor concern

• The FT reports that Dutch activist Follow This, is pressuring BP to change its stance on climate risk having (partially) succeeded in its campaign to achieve the same result at Royal Dutch Shell 

• Institutional Investors are supportive of the development of 'prescriptive' accounting style standards to standardise ESG reporting according to an EY global survey

• United Kingdom | The Wates Corporate Governance Principles for large private companies have been released 
• In Brief | The Qatar Financial Markets Authority (QFMA) has released unified listing rules for funds and a new draft governance code for listed funds for consultation.  No deadline is provided for submissions on the draft governance code or draft listing rules.

• An expectation of zero short term bonuses? Westpac shareholders have delivered a first strike against the remuneration report

Australian Prudential Regulation Authority (APRA)

• Top Story | APRA sets 'higher bar' for RSE licensees: APRA has announced new measures to strengthen outcomes for superannuation members to apply from 1 January 2020

Australian Securities and Investments Commission (ASIC)

• Top Story | Raising standards in financial services dispute resolution: ASIC to conduct onsite reviews of internal dispute resolution systems and consult on changes to IDR standards and guidance 
• Delay in implementation of certain fee disclosure changes: ASIC has announced that the start date for updated superannuation fees and costs disclosure has been deferred to enable consultation on recommendations raised in ASIC Report 581.
• In Brief | ASIC has released a consultation paper proposing to remake its class order regarding warrants and out of use notices.  The new instrument would continue the relief, without significant changes, currently given by Class Order [CO 08/781] Warrants: Out-of-use notices, so that the ongoing effect will be preserved without any disruption to the entities that rely on it. The class order is due to expire on 1 April 2019.  Consultation will close on 6 February 2019.

• New Zealand | The Reserve Bank of NZ is consulting on a proposal to raise the amount of capital that banks must hold as a means of 'having a safer banking system'.
• The ACCC has released its final report on the residential mortgage prices of the five major banks subject to the bank levy. 
• Implementation of new professional standards for financial advisers update: ASIC has clarified RG 146 requirements for advisers, FASEA has confirmed accreditation requirements for professional designation programs.
• In Brief | Following APRA's recent announcement of enforcement action against IOOF entities and certain executives, IOOF's CEO and Chair have reportedly stepped down (temporarily) from their respective roles.  IOOF non-executive director, Allan Griffiths has reportedly been appointed as acting Chair.  

• United Kingdom | New calls to break up the big four: A report commissioned by the UK Shadow Chancellor, has reportedly recommended a number of measures to reform the UK audit sector including breaking up the big four 
• United Kingdom | The Financial Reporting Council has issued revised auditing standard and is consulting on guidance for quality bank audits
• In Brief | Update on the progress of the Kingman Review: The minutes from the November meeting of the independent review into the Financial Reporting Council (Kingman Review) were released on 12 December.  

Cybersecurity and Privacy

• Top Story | ACCC's Digital Platforms Inquiry calls for far-reaching reforms
• A global coalition of technology firms has issued a statement calling on the Australian government to address 'flaws' in the recently enacted Assistance and Access Act when it reconvenes next year
• In Brief | AustralianSuper has released a statement advising that the accounts of about 11,000 AustralianSuper members have been the target of a security breach that occurred earlier in the year.  Reportedly the fund 'does not believe there has been any misuse of the accounts' and 'All affected members have been contacted and the fund has reported this account activity to the Privacy Commissioner at the Office of the Australian Information Commissioner (OAIC)'.  

Conduct Risk

• Room to improve?  35% of employees in Australian, NZ and UK workplaces say that they have been aware of misconduct during the past 12 months at work but only 65% say they would report it according to the latest IBE survey of employee attitudes to ethics in the workplace.
• An ACTU survey has found nearly 64% of women and 34% of men have experienced sexual harassment at work
• Discrimination is still an issue in Irish workplaces according to a new study 

Whistleblowing

• The Royal Bank of Scotland has reportedly launched an investigation following whistleblower allegations of cultural issues at the lender

Climate Risk

• In Brief | The largest ever group of institutional investors (415 institutional investors with $32 trillion under management including some of the world's largest pension funds, asset managers and insurance companies) have signed the Global Investor Statement, calling on governments around the world to urgently increase their efforts to meet the Paris climate change agreement goals (including by committing to phasing out coal power).  The agreement was signed during the COP24 conference( the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change in Poland).
• In Brief | The latest Climate Change Performance Index evaluating, comparing and ranking the climate protection performance of 56 countries and the EU (together responsible for more than 90% of global GHG emissions) in combatting climate change has ranked Australia 56th, putting it in the very low category with China, Canada, the US, the Republic of Korea and Saudi Arabia.  Overall, the CCPI found that to implement the Paris Agreement, countries must raise their ambitions and enact concrete measures to make their individual contributions to the global goal.

Supply Chain Risk

• Ansell has reportedly committed to various measures to mitigate supply chain risk following media reports of concerns relating to migrant workers employed by Malaysian glove suppliers
• In Brief | The Federal Modern Slavery Act 2018 (Cth) received royal assent 

• Prime Trust | The HCA has unanimously allowed (in part) ASIC's appeal against the Full Federal Court decision in the Prime Trust matter
• ASIC has announced that the former CFO of Leighton Holdings has been found guilty of falsifying the company's accounts

• The government is consulting on the proposed structure and function of a Federal ICAC (Commonwealth Integrity Commission)