Governance News 5 June 2019

60 minute read 04.06.2019 Mark Standen, Siobhan Doherty, Kate Hilder

This week's issue features: coverage of APRA deputy chair John Lonsdale's speech to 2019 Actuaries Summit; APRA's call for PHIs to take a more proactive approach to the sustainability risks facing the sector; and ASIC's latest Market Integrity Report. This issue also includes coverage of two Governance Institute reports: 2019 Risk Management Survey and the Annual Remuneration Report.

Boards and Directors Navigation Show below Hide below

The best way to lift governance standards? An expert panel suggests (among other things) introducing 50% board gender quotas and annual director elections
United States | Workers on US boards? The Washington Post reports that US Presidential candidate Bernie Sanders has outlined two measures to give US workers a greater ownership stake in companies
United Kingdom | ICSA is consulting on proposed changes to strengthen independent board evaluation

Diversity Navigation Show below Hide below

Heidrick & Struggles predicts that based on current trends, gender parity on US Fortune 500 boards will be reached by 2023
In Brief | The New York Times reports that JPMorgan Chase has settled a lawsuit brought by a father who was allegedly denied full paternity leave on the basis that he was not the primary caregiver. Reportedly, as part of the settlement, JPMorgan has agreed to offer employees leave policies on non-gendered basis
In Brief | According to Quartz, of the 10 biggest US companies to have gone public or filed to go public this year, none is led by a woman, and the average number of women on their boards is less than two. Excluding WeWork, which filed its registration confidentially, the average number of women on the list of the highest paid executives disclosed in each company's S-1 filing, is 0.56
In Brief | Age diversity in the workplace requires acceptance that age and ability/seniority are not necessarily linked and that mutual respect is needed on both sides for the new dynamic to work writes Bernard Salt

Remuneration Navigation Show below Hide below

Top Story | The operation of the two strikes rule: Two strikes and….
The Governance Institute's seventh annual board remuneration survey report has found board pay has increased overall (except in the financial sector)
In Brief | The UK Directors Remuneration Policy and Directors Remuneration Report Regulations 2019 come into force on 10 June. The regulations partially implement the Shareholder Rights Directive (including in relation to the content of the directors' remuneration policy and the remuneration report)

Shareholder Activism Navigation Show below Hide below

Exxon Mobil 2019 AGM result: A shareholder proposal to separate the board chair and CEO roles secured 41% shareholder support
Bed Bath and Beyond has reportedly reached a settlement with activist investors pushing for board renewal
In Brief | UK MPs Call for Parliament's Pension Fund to Divest Fossil Fuels? Reportedly, more than 250 UK parliamentarians have called for their pension fund to disclose its carbon intensive investment and to quickly phase out fossil fuel investments including (BP and Royal Dutch Shell Holdings)

Institutional Shareholders and Stewardship Navigation Show below Hide below

United Kingdom | BlackRock has reportedly cautioned that proposed changes to the UK Stewardship Code (and more particularly, proposed changes to disclosure rules) could deter companies from listing in the UK
United Kingdom | Investor engagement on governance issues is not 'always consistent with the high level of public commitment'? The UK Investor Forum has released a report calling for 'significant improvements' to be made to the way in which investors and companies currently engage on governance issues

Markets and Exchanges Navigation Show below Hide below

Commencement deferred: Commencement of changes to ASX Listing Rules deferred until December 2019

Corporate Social Responsibility Navigation Show below Hide below

UN Principles need to be tougher to be meaningful? 45 civil society organisations have called for a rewrite of the Principles for Responsible Banking

Financial Services Navigation Show below Hide below

Top Story | 'APRA has provided the platform and handed over the microphone; actuaries need to turn it on and speak up' says APRA Deputy Chair John Lonsdale
PHIs cannot continue to take a passive approach: APRA has directed PHIs to take steps to implement 'robust strategies' to improve their resilience to sustainability challenges facing their sector or expect more assertive action from APRA
ASIC Commissioner Cathie Armour has identified enhanced supervision, the crypto-asset market, and market 'cleanliness' as some of the specific areas of focus of the regulator in the wake of the Financial Services Royal Commission
ASIC Market Integrity Report July to December 2018: conduct governance, technology and resilience and effective capital markets are highlighted as ASIC's three areas of continuing focus
Treasury is consulting on proposed financial institutions supervisory levies that will apply for the 2019-20 financial year
ASIC has released updated ICO guidance to assist businesses in complying with their obligations under the Corporations Act
IOSCO is consulting on the approach regulators should take when regulating the trading of cryptoassets on CTPs
APRA has released updated to frequently asked questions on the implementation of Protecting Your Super legislative amendments
In Brief | Not a good deal for everyone? The Centre for Independent Studies has issued a policy paper that makes the case for a shift to a voluntary superannuation model. The report argues the current system was not designed to account today's conditions (eg the increase in the prevalence of part time work) and that as such it disadvantages low income workers/millennials, for example by making it harder for them to save a deposit for a home. 'A voluntary system, or at a minimum one that has a far higher threshold for compulsory participation, would give millennials and low income workers greater flexibility in their savings choices' the report argues

Accounting and audit Navigation Show below Hide below

PwC has released a 'balanced scorecard' on audit quality including the firms' individual audit results from ASIC's latest audit inspection findings

Risk management Navigation Show below Hide below

Top Story | Australian risk managers consider their organisations to be well prepared (overall) to face key risks facing their organisations in the short and longer term
Net Promoter Scores and customer satisfaction levels are reportedly trending upwards for the big four banks following the Financial Services Royal Commission
Westpac's real time payment platform PayID has reportedly been the target of a cyberattack, Westpac has reportedly said that no customer bank account numbers were compromised
United States | SEC has awarded a whistleblower $4.5m

Contact

Mark Standen

Consultant, Sydney
- +61 2 9921 4902
- +61 412 104 902
Siobhan Doherty

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

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