Governance News 30 March 2022

60 minute read + (PDF download) 30.03.2022 Mark Standen, Siobhan Doherty, Kate Hilder

In this issue we cover several significant ESG developments including the release of the SEC's long-awaited proposal for a mandatory climate risk disclosure rule. On the financial services front, we cover the consultation on proposed options for the regulation of the crypto sector. This issue also include coverage of the Final report of the Review of the insolvent trading safe harbour as well as coverage of the PJC report into the Security Legislation Amendment (Critical Infrastructure Protection) Bill 2022 which paves the way for the passage of the legislation (subject to certain amendments being made) and more….

Boards and Directors Navigation Show below Hide below

Top Story | High Court endorses shareholders' ability to examine former directors
New Director ID data standard registered, ATO reminds directors of application cut-off dates

Remuneration Navigation Show below Hide below

Acting on 'say on pay' feedback: GE CEO agrees to $10m pay cut ahead of 4 May AGM

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Climate Action 100+ flags key shareholder climate resolutions at North American companies heading into the 2022 proxy season
Another record year for shareholder ESG resolutions: Report finds the number of shareholder ESG resolutions has increased 20% on last year
Targeting individual board members: Majority Action has called on Chevron shareholders to oppose the reelection of two board members in protest over the company's climate stance
HSBC makes new climate commitments, activists withdraw climate resolution ahead of the AGM
PepsiCo to reduce plastic packaging following engagement with As You Sow
ACCR calls on Santos shareholders to support shareholder climate resolutions ahead of the AGM
'Good business': Investor coalition targets Sainsbury's with a 'living wage' shareholder resolution, plans to write to all supermarkets to push for change
SEC denies JP Morgan Chases' request to block shareholder resolution pushing for increased board diversity and enhanced disclosure of board skills/experience
In Brief | Upcoming Barclays 'Say on climate vote': ShareAction has called on shareholders to oppose the bank's climate transition plan at the 4 May AGM on the grounds that its stance on fossil fuels is not sufficiently robust. Separately, Market Forces says the plan makes the bank's own net-zero goal 'impossible'
In Brief | ShareAction has called for 'AGM Activist' volunteers to quiz the leaders of UK companies on their ethnicity pay gap at upcoming AGMs

Institutional Shareholders and Stewardship Navigation Show below Hide below

Investment Association flags climate change and DEI as top concerns ahead of the 2022 AGM season

Diversity Navigation Show below Hide below

2021 board ethnic diversity target not met: 11% of FTSE 100 boards failed to meet the target within the 2021 timeframe
Accelerating progress on workplace DE&I issues: The UK Institute of Directors has launched a new diversity commission
In Brief | A step forward: EU states have given in principle approval for a plan, first put forward in 2012, to introduce minimum board gender diversity quotas for publicly listed companies
Commitment to closing the gender pay gap is lagging? Research finds most US companies do not disclose undertaking gender pay gap audits, despite increased stakeholder concern about gender pay parity

Disclosure and Reporting Navigation Show below Hide below

SEC seeks views on a long-awaited proposal for a mandatory climate disclosure rule
In Brief | Joining forces: The IFRS Foundation and the GRI have entered into a 'collaboration agreement' under which they will seek to align the work programs and standard setting activities of the International Sustainability Standards Board (ISSB) and the Global Sustainability Standards Board (GSSB), ahead of the expected release of a draft global standard by the ISSB later this year
In Brief | The TNFD has released the first beta version of a proposed nature-related risk management framework for consultation. The draft framework comprises three components: 1) foundational guidance covering key science-based concepts and definitions; 2) TCFD-aligned recommendations; and 3) 'how to' guidance for nature-related risk and opportunity analysis. Ahead of the planned final release in September 2023, it's planned that a further three iterations of the beta versions will be released

Markets and Exchanges Navigation Show below Hide below

'Significant concern': ASIC says the ASX will be required to provide an incident report on the recent ASX24 futures market outage

Regulators Navigation Show below Hide below

Top Story | ACCC 2022/23 Priorities | The green light to target greenwashing
ASIC has released its enforcement update for H2 2021
APRA has announced executive changes

Financial Services Navigation Show below Hide below

Top Story | Consultation on crypto regulation kicks off
Top Story | Status update: Tracking progress against each of the Hayne Commission's 76 recommendations
Hayne implementation: Cancellation of planned review of mortgage broker commissions welcomed by industry
Hayne implementation: Quality of Advice Review issues paper released
Hayne implementation: Transition to the FSCP: Statement from the Tax Practitioners Board
APRA calls on mutual ADI boards to address governance concerns, flags boards should expect to engage on the issue over the next 12 months
APRA says superannuation funds should expect the regulator to continue its 'muscular approach' to transforming the sector, calls on trustee boards to take action to address the 'widening sustainability gap'
Government flags plans to enact changes to non-arm’s length expense provisions
ASIC has released the final mandatory requirements for the new internal dispute resolution data reporting framework
ASIC targets 'misleading' advertising of managed funds: The regulator has launched a new surveillance exercise
BNPL self-regulation one year on: BNPL Code Compliance Committee releases first report on Code compliance, review of the Code planned for 2023
International coalition of consumer groups calls for increased regulation of the BNPL sector
Senate report into the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022 due on 24 March 2022 has not yet been released
CCIV implementation: ASIC consults on proposed approach
ASIC launches new educational resources aimed at helping young people to feel more confident in making financial decisions
In Brief | 'Size matters when it comes to boosting financial outcomes for super members': APRA report finds half of small RSEs face immediate sustainability challenges, and more than half of medium-sized RSEs have adverse trends in sustainability
In Brief | APRA has written to life insurers and friendly societies to announce that it has decided to suspend the planned implementation of the policy contract term measure for individual disability income insurance
In Brief | ASIC has warned 'finfluencers' off giving unlicensed financial advice: ASIC has published an information sheet - INFO 269 Discussing financial products and services online – outlining how the law applies to social media influencers including when an AFS licence is needed, and reminding AFS licensees who use influencers to 'do their due diligence' and ensure appropriate risk management/monitoring systems are in place
In Brief | APRA has published an announcement by the International Organisation of Pension Supervisors (IOPS) outlining good industry practices when forecasting and communicating future retirement benefits
In Brief | Hayne implementation: As part of its review of the Legislative Framework for Corporations and Financial Services Regulation, the ALRC has released a new background paper outlining how 'the "shifting sands" of regulatory approaches [to financial services regulation] have resulted in legislation that is unwieldy and extraordinarily complex'. The paper flags that to address this, there may be a need for both: 1) a new CAMAC to be established to 'continually review and make suggestions for improving the law'; and 2) a need to move away from the use of legislative instruments to modify or amend it, in favour of a more flexible approach

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The PJC report into the Security Legislation Amendment (Critical Infrastructure Protection) Bill 2022 paves the way for the passage of the legislation
New climate commitments: ING to stop financing new oil and gas projects
In Brief | Action is lagging behind climate commitments? InfluenceMap report finds that the climate actions being taken by 30 of the world's largest listed financial institutions are 'misaligned with 1.5 °C climate scenarios' and that in the absence of mandatory regulatory requirements, and for as long as failure to act remains legally/economically viable, this is unlikely to change