• Top Story | Time for the financial services sector to embrace fixed remuneration? A study by Macquarie University has found that fixed remuneration (not variable remuneration) is the most effective in promoting compliance and that payment of bonuses does not translate into productivity gains. 
• Domain shareholders have approved the sign-on deal for new CEO Jason Pellegrino which includes a cash bonus of $500,000 and shares worth $2 million
• In Brief | France to penalise firms who pay women less? The WSJ reports that from 1 January, French firms will be required to report on their gender pay gap using a range of government-approved metrics .  Firms will then have three years to reduce the gap to zero or potentially face a fine of up to 1% of their total payroll (currently the average gap is 9%). Labor Minister Muriel Pénicaud is quoted as saying that the focus on enforcement is aimed at driving results 'as I tell companies, instead of giving your money to the government, give it to women, it’s smarter' she said.

• Aberdeen Standard Investment has reportedly called for more 'prescriptive' ASX guidelines to better 'entrench the concepts of corporate social responsibility in Australian boardrooms' 

• ESG resolution at Woolworths: ACCR’s supply chain resolution at Woolworths received 14.92% proxy support
• Do proxy firms exert too much influence or not? To coincide with the SEC Roundtable on Proxy reform, the American Council for Capital Foundation has released a report arguing there is a need for more stringent regulatory oversight of proxy firms given their level of influence.  Separately, Glass Lewis has taken the opposite view. 
• Should proxy firms be subject to the same requirements/oversight as investment advisers? A US Senate Bill has been introduced proposing to extend the existing regulatory regime that applies to investment advisers to proxy firms.  
• Proxy firm ISS has released 2019 benchmark policy updates: gender diversity is a priority in the US, and in Europe/UK changes to policies reflect growing investor concern over audit quality. 

• Hong Kong | HKEX’s annual review of compliance with the Corporate Governance Code has found reported compliance remains high with 100% of issuers reporting compliance with 70 of 78 Code Provisions
• United States | The WSJ reports that SEC Chair Jay Clayton has called on companies to provide more detailed disclosure on Brexit risk. 

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

• Top Story | Financial Services Royal Commission Round 7 (policy) hearings: Week 1

Other Developments

• Increased competition in the financial services sector? Assistant Treasurer Stuart Robert has welcomed the passage of legislation which will relax ownership restrictions on banks and insurers.  
• Update on preparations for the new education and professional standards regime for financial advisers: ASIC has reminded financial advisers of the need to register before 31 December, FASEA standards framework released and new draft legislative instruments released for consultation. 
• Review of unfair contract term protections for small business: consultation on the need for further reforms.  
• Societe Generale has agreed to pay fines amounting to $1.34bn to US regulators to settle proceedings in relation to violations of US sanctions requirements

• United Kingdom | The BEIS Committee has announced it will undertake a 'Future of audit inquiry' following publication of the CMA and Kingman Review reports with the aim of ensuring the recommendations are acted on swiftly. 
• United Kingdom | The FRC has announced a review of the 2016 changes to ethical and auditing standards to determine whether further measures are required to strengthen auditor independence, reduce conflicts, improve quality of audit and preserve trust in independent audit. 
• Alleged breach of ICAEW Code of Ethics: The UK FRC has announced that a formal complaint has been brought against KPMG and one of its partners in relation to alleged breaches of the ICAEW Code of ethics

Supply Chain Risk

• The government has released draft guidelines on a proposed new government procurement policy aimed at increasing integrity in government procurement processes
• Sourcing products ‘ethically’ makes 'good financial sense'? The AFR reports that Rio Tinto has said that securing ethically sourced materials will pay off for companies (like Nespresso) as consumers push for greater transparency and assurance about where products come from and how they are produced.
• In Brief | Debate on the Federal Modern Slavery Bill: Modern Slavery Bill 2018 is due to resume in the senate on Tuesday 27 November

Whistleblowing

• Griffith University research adds further weight to the need for urgent action to better protect whistleblowers: 81.6% of those who reported cases of unethical behaviour in their workplaces faced repercussions for speaking up.
• In Brief | The FT reports that Lloyds Banking Group has apologised and paid compensation to a whistleblower whose 2013 internal report which documented and criticised the way in which HBOS executives had concealed a fraud in a specific branch before the bank was taken over by Lloyds during the financial crisis.  

Cybersecurity

• United States | Human error/loss of physical data (not hacking) is the key cause of data breaches in the health care sector according to an HHS study
• In Brief | The FT reports that Apple CEO Tim Cook has said that new regulations for the technology industry to protect user privacy are 'inevitable' in the wake of a series of scandals.  'Generally speaking, I am not a big fan of regulation…I’m a big believer in the free market. But we have to admit when the free market is not working.  And it hasn’t worked here.  I think it’s inevitable that there will be some level of regulation . . . I think Congress and the administration at some point will pass something' he is quoted as stating.

Other Developments

• Nissan Chair Carlos Ghosn is reportedly facing criminal investigation and will be stripped of his chairmanship following allegations of criminal misconduct.
• Stronger enforcement approach in relation to black economy offences: The government has released a consultation paper seeking feedback on proposals to implement Black Economy Taskforce recommendations announced in the 2018-2019 Federal Budget.

• In Brief | Why do small/medium businesses fail? Lack of leadership and management, and lack of planning and execution were identified by 25% of CEOs of small/medium businesses as the key reasons for business failure, 14% identified poor financial management and 13% identified failure to anticipate the impact of external factors/failure to mitigate risks.
• In Brief | The UK Insolvency (Amendment) (EU Exit) Regulations 2018 were laid in draft form before UK Parliament on 19 November (they are yet to be approved by either House).  They are made under section 8(1) of the European Union (Withdrawal) Act 2018 and make amendments to legislation in the field of cross-border insolvency in consequence of the UK's withdrawal from the European Union.