Governance News 19 June 2019

60 minute read (PDF download) 18.06.2019 Mark Standen, Siobhan Doherty, Kate Hilder

This week's issue features, among other things ACSI's announcement that the 30% female board representation target for ASX200 has been met, ASIC's focus areas for 30 June 2019 financial reporting and coverage of the key themes to emerge from MinterEllison's recent roundtable discussion on privacy, data protection and trust in financial services.

Diversity Navigation Show below Hide below

Top Story | ASX 200 reaches 30% women directors
First business in Australia ‘certified’ on equal pay: Philip Morris achieves an Australian first in closing gender pay gap
A Boston Consulting Group report has found that most diversity and inclusion policies in large Australian companies are failing to deliver the expected benefits to target groups
Scotland | For the first time, more than 50% of all board members appointed to oversee public bodies in Scotland are women
United Kingdom | Good progress on improving gender diversity, but less progress on ethnic diversity? The FT reports that the Bank of England Governor has said the bank is on track to meet its 2020 gender diversity target
Glass Lewis reports that 'in the absence of government action' investors are taking the lead on pushing for increased gender diversity in Brazilian boardrooms
OECD 2019 Corporate Governance Factbook released: For the first time the FactBook includes comparative data about the gender composition of boards

Remuneration Navigation Show below Hide below

United Kingdom | UK shareholders have the information and the power they need to hold companies to account without the need for further reform? The UK government will not take any specific actions in response to a BEIS executive remuneration report, until the impact of recent reforms already in place is known
United Kingdom | Increased pay gap disclosure in the UK is leading to increased scrutiny, and to (slow) progress in addressing the issue?

Institutional shareholders and stewardship Navigation Show below Hide below

In Brief | The Office of New York State Comptroller's climate action plan includes among other things, a commitment to 'formally integrate climate risk assessment and engagement into investment processes to evaluate companies in high impact sectors on climate transition readiness'
In Brief | The biggest question that miners face is around ESG? The AFR reports that BlackRock's chief investment officer, Evy Hambro has identified satisfying investors' ESG demands will be the chief challenge for big miner over the next decade

Other shareholder news Navigation Show below Hide below

S&P Dow Jones is reportedly removing Facebook (Wells Fargo, Oracle and IBM) from its S&P ESG Index

Regulators Navigation Show below Hide below

ASIC has reportedly hired an organisational psychologist to assist with its targeted reviews of corporate governance practices
First case concerning the alleged breach of conflicted remuneration provisions: ASIC has commenced civil penalty proceedings in the Federal Court against SMSF advisers
AUSTRAC has ordered Afterpay to appoint an external auditor to review its AML/CTF compliance
United States | CFTC member Rostin Beham has reportedly given an interview cautioning that climate change poses a major financial risk: 'It’s abundantly clear that climate change poses financial risk to the stability of the financial system' he is quoted as saying

Financial Services Navigation Show below Hide below

Time to prioritise NPP services: The Reserve Bank of Australia has called on the major banks to prioritise the roll out and development of NPP services
Open Banking update | Treasury has released the second version of a draft Designation Instrument for the application of the Consumer Data Right for consultation until 12 July
Increased scrutiny of the 'bank of mum and dad'? The AFR reports that in response to the new Banking Code of Practice lenders are tightening lending controls
APRA has responded to the first phase of consultation on proposed changes to the ADI capital framework: APRA maintains that the proposed changes will neither impact competition in the mortgage market nor adversely impact access to credit
Leadership changes at ANZ announced
APRA has imposed directions and conditions on AMP Super RSE licensees
ASIC has announced that ANZ has complied with the Court Enforceable Undertaking (CEU) entered into with the regulator in March
ASIC has approved AFCA Rule changes for legacy complaints: AFCA said it will accept complaints from 1 July 2019 and follow its usual practice of referring them back to the financial firms for resolution. It will start investigating any unresolved matters from 1 October 2019
ASIC has issued guidance for AFS licensees about how they can mitigate the risks to their clients and business of share sale fraud
United Kingdom | Are homebuyers being treated fairly? The CMA has launched a consumer law investigation into the leasehold market
In Brief | APRA's proposed supervisory levies for 2019-20: The Insurance Council of Australia's submission to Treasury raises a number of concerns about the proposed increased levy on the sector including why the charges should rise at a higher annual rate for general insurers than banks and calls for consideration to be given to implementing the Australian National Audit Office recommendation that a stakeholder panel be established to discuss issues relating to the levies processes
In Brief | Fintech has become mainstream? EY's third biennial FinTech adoption trends survey, has found that awareness of fintech is at record levels — 96% of the 27,000 consumers surveyed (across 27 global markets) reported they were at least aware of a FinTech transfer or payments service — and 75% of people had used one. In Australia, 58% of Australians are now using fintech products and services
In Brief | UK neobank Revolut launched in Australia: UK neobank Revolut has reportedly joined Xinja, Volt Bank, 86 400 and Up in offering (certain) digital only banking services such as money transfers in Australia. Reportedly Revolut has obtained a banking licence from the European Central Bank, but (as it has no plans to accept deposits) will not need an ADI license from prudential regulator APRA

Accounting and audit Navigation Show below Hide below

United States | KPMG has agreed to pay a $50m penalty to settle SEC allegations it altered past audit work after receiving 'stolen information' about planned PCAOB inspections and for 'cheating on training exams'

Risk management Navigation Show below Hide below

Top Story | Lessons on privacy, data protection and trust in financial services
In Brief | Former APRA Chair and author of APRA's prudential inquiry into the CBA John Laker has reportedly told delegates at the Governance Institute of Australia's governance and risk management forum that cultural change should not be viewed as a project to be completed but as an ongoing challenge that needs to be worked on continually. 'There's a risk if you put a time limit on when you think the job is completed, because it's a job that requires constant attention' Dr Laker reportedly said

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Siobhan Doherty

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

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Governance News 19 June 2019

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