Governance News 18 May 2022

45 minute read + (PDF download) 18.05.2022 Mark Standen, Siobhan Doherty, Kate Hilder

This issue features coverage of the Governance Institute of Australia's latest Diversity Index as well as a number of significant ESG-related developments including BlackRock's recent update on its stance on climate-related shareholder resolutions and a wrap up of recent significant climate votes. The issue also includes our key takeaways from the Regulators' panel session at the Governance Institute Forum 2022, as well as key financial services developments and more…

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Top Story | 'Stagnating': Report finds ASX 300 boards continue to lag on cultural diversity
In Brief | The Californian Superior Court has ruled that California’s gender quota law for corporate boards - Senate Bill 826, which requires California-based, publicly-held domestic or foreign corporations to have at least one female director by 31 December 2019, and, depending on board size, up to three female directors by the end of December 2021 – is unconstitutional because it 'violates' the Equal Protection Clause of the California Constitution. This follows an earlier separate ruling that California’s diversity mandate for corporate boards is also unconstitutional.

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'Generous' IPO equity awards unnecessary: SOC Investment Group has urged shareholders to vote down the 'say on pay' proposal at Rivian Automotive Inc

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Climate Action 100+ flagged shareholder climate resolution at Valero Energy Corporation secures strong support, but fails to pass
Shareholder Scope 3 emissions reduction resolution at Conoco Phillips fails to secure majority backing
Say on Climate | 88.5% of BP shareholder back management's say on climate resolution; vote down shareholder Scope 3 emissions reduction resolution
Occidental Petroleum and Phillips66 shareholders (separately) reject shareholder Scope 3 emissions reduction resolutions
ExxonMobil board recommends shareholders oppose all five shareholder proposals, including two climate proposals flagged by Climate Action 100+
First institutional investor group-led climate shareholder proposals filed in Japan
NY State Comptroller urges fellow Chipotle shareholders to support the fund's racial equity audit proposal ahead of the upcoming meeting
NYC’s Public Pension Systems secures agreement from four major financial firms to disclose individual director skills and diversity information, the funds are now pushing for NextEra Energy follow suit

Institutional Shareholders and stewardship Navigation Show below Hide below

Too 'prescriptive': BlackRock provides an update on its approach to voting on shareholder climate proposals, flags it is likely to support fewer proposals in 2022 than in 2021
State Street Global Advisors has released an update on its 2021 climate stewardship activity

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Regulators' panel discussion provides insights into ASIC, ASX and ACNC key areas of focus
The US CFTC will hold its first ever meeting to discuss the trading of carbon offsets and carbon derivatives

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New report finds climate change is a key concern for Australia's C-suite

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ASIC puts licensees on notice following RI Advice decision
APRA Chair Wayne Byres flags key areas of focus in the banking, superannuation and insurance sectors
Streamlining processes: AFCA implements 'early merits' review process following a successful pilot
The AFA considers policy reform is on hold pending the findings and recommendations of the Quality of Advice Review
In Brief | The ALRC has confirmed that it will have regard to the findings and recommendations of the Quality of Advice Review in making any recommendations of its own as part of its own Review of the Legislative Framework for Corporations and Financial Services Legislation
In Brief | Anglicare Australia, together with over 100 other organisations, has called on the in-coming Federal government to establish an independent inquiry to formulate recommendations around tightening the regulation of the BNPL sector (including implementing consumer protections)
In Brief | The Federal Liberal Party have pledged that if elected, first home buyers will be able to access up to 40% of their superannuation (capped at $50,000) to apply toward the purchase of a home. The proposed scheme would apply to both new and existing homes with any superannuation savings 'invested' to be returned to home-buyers' superannuation fund upon the sale of the home (including a share of any capital gain). The Financial Services Council has expressed concern about the proposed scheme, among other things, because it considers that it will 'weaken the sole purpose of superannuation, which is to provide higher standards of living in retirement'
In Brief | Ahead of the Federal Election, the Association of Independent Retirees has expressed concern that if elected, the Federal Labor Party would 'weaken' the Your Future Your Super performance test by 'interfering with the primary objective of super funds to maximise investment returns by giving a dispensation to funds with strategies that pursue other objectives'

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The AICD has welcomed the Labor Party's commitment to implementation of the Respect@Work report recommendations

Contact

Siobhan Doherty

Partner, Sydney
- +61 2 9921 4339
- +61 413 187 544

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Governance News 18 May 2022

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