Governance News 6 November 2019

60 minute read (PDF download) 05.11.2019 Mark Standen, Siobhan Doherty, Kate Hilder

This week's issue features (among other things) coverage of ASIC's action against IOOF-owned financial advice business RI Advice and former financial adviser John Doyle, the ICA's announcement that it has approved a new General Insurance Code of Practice and SEC's proposals to modernise the shareholder proposal rule.

Diversity Navigation Show below Hide below

Top Story | Still yet to crack 30%? The latest AICD gender diversity progress report has found ASX200 boards have yet to reach the 30% female board representation target with gender diversity actually backsliding since 2018
Diversity and inclusion efforts are stalling because many companies approach the issue with a 'bull market strategy' according to Morgan Stanley VC Carla Harris
In Brief | KPMG has proposed targeted amendments to the child care subsidy as a means of narrowing the gender participation gap. Decreasing the financial disincentive for secondary earners (usually mothers) to take on more days when returning to work, could deliver benefits not only to them but to the broader economy the report argues

Remuneration Navigation Show below Hide below

In Brief | Demonstrating clear CEO accountability? The SMH reports that Westpac CEO Brian Hartzer has voluntarily given up $1.6m in bonuses this year, and separately that ANZ CEO Shayne Elliott's short term incentives have been reduced by $250,000 ahead of the lenders' respective AGMs
In Brief | Is Judo bank's pay structure the way forward for banks on remuneration? Writing in The Australian, Alan Kohler suggests that Judo Bank's remuneration structure where executives are paid a salary and performance is rewarded with equity in the business (ie no short term bonuses are paid) offers a viable alternative to other lenders and would have the benefit of providing the 'right' incentives

Meetings and proxy advisers Navigation Show below Hide below

Recent AGM results: voting outcomes on remuneration, director election/re-elections and ESG proposals
United States | 'Striking a balance' (nor not?): SEC has voted to propose amendments to 'modernise' the shareholder proposal rule. However, there are concerns that the proposed changes will make it harder to submit resolutions and therefore serve to limit the ability for shareholders to hold companies to account

Disclosure and reporting Navigation Show below Hide below

New Zealand | The NZ government is consulting on a proposed mandatory (comply or explain) TCFD disclosure requirement for listed issuers, banks, general insurers, asset owners and asset managers
United Kingdom | Room for improvement? The FRC annual review of corporate reporting released

Regulators Navigation Show below Hide below

Top story | Is the ACCC becoming a second privacy regulator?

Financial Services Navigation Show below Hide below

FSRC Case Study: ASIC has commenced civil proceedings against IOOF-owned financial advice business RI Advice and former financial adviser John Doyle
ASIC has provided an update on Federal Court proceedings against NULIS Nominees Ltd and MLC Nominees Pty Ltd in connection with alleged fee for no service issues
The Insurance Council of Australia has approved a new General Insurance Code of Practice, the new code will be formally launched in 'early 2020'
$185 million in compensation awarded to consumers in AFCA's first 12 months
Australian Small Business and Family Enterprise Ombudsman says she wants to hear from small and family enterprises being exited from financial planning businesses
ASIC has cautioned superannuation trustees to improve the standard of communication to members ahead of the deadline to inform members about changes to insurance cover
Consultation on legislation for Australian Business Growth Fund announced
In Brief | AFCA announced the appointment of ex-ATO assistant commissioner Justin Untersteiner as chief operating officer, commencing 2 December 2019
In Brief | Westpac New Zealand Limited (Westpac) has retained its accreditation as an internal models bank following completion of an 'extensive remediation process' required by the Reserve Bank of New Zealand. As a condition of retaining its accreditation Westpac will need to satisfy several ongoing requirements, RBNZ said

Accounting and audit Navigation Show below Hide below

Accounting bodies CAANZ, CPA and IPA have called for a re-examination of the way in which financial and tax advice frameworks operate
In Brief | 'Audits are not consistently reaching the necessary high standards required to provide confidence in financial reporting': The UK FRC's latest annual report — Developments in Audit — has found that 'auditors continue to struggle most with challenging management sufficiently, especially in more judgmental areas, such as long-term contracts, goodwill impairment or the valuation of financial instruments'

Risk management Navigation Show below Hide below

Estimated $200-300m in remediation? Woolworths Group has committed to full remediation for approximately 5,700 salaried store team members affected by non-compliance with the general retail industry award (GRIA)
Consequences of breaching company's personal conduct policy: A relationship in breach of company policy on personal conduct has reportedly led to the termination of McDonalds CEO Steve Easterbrook's employment
The Royal Commission into Aged Care has released its interim report recommending an overhaul of the aged care sector. In a statement, the Governance Institute said the report has governance implications for both the aged care sector and more broadly
In Brief | The US is on track to exit the Paris Agreement? The US has reportedly notified the UN of its intention to withdraw the United States from the Paris Agreement. The withdrawal process will reportedly be completed one day after the 2020 US Presidential election on 4 November 2020. Separately, more than 11,000 scientist signatories from around the world, have issued a paper warning that 'planet Earth is facing a climate emergency'

Other news Navigation Show below Hide below

'Green Tape' review to be led by Professor Graeme Samuel: The government has announced an independent review of the Environment Protection and Biodiversity Conservation Act 1999

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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