Upcoming Mallesons seminarsOn 15 August 2002, the Corporate Governance Council issued a statement urging Australian listed companies to pay special attention to particular corporate governance issues in preparing their 2002 annual reports.
The statement does not have the force of law but is likely to be of significant influence in terms of market practice for annual report content. It was issued at this point in time with that purpose in mind.
What is the Corporate Governance Council?
The Corporate Governance Council is a body recently convened by the ASX to develop an agreed set of corporate governance standards of best practice for Australian listed companies. Its members include the main Australian shareholder and industry representative bodies.
What do we have to do for our 2002 annual report?
The issues to which the Council is urging companies to pay special attention in their 2002 annual reports are the following:
- Share and option plans - fully disclose the existence and conditions of all such plans in operation, including performance hurdles;
- Audit committees - disclose the composition of and charter for the audit committee. Also, reasons must be given if the committee does not have a majority of independent directors (chaired by an independent director who is not the chairman of the boards), has any management members or does not operate under a charter;
- External auditors - include an M1 analysis of the total fees paid to external auditors, including a break down of fees for non-audit activities, when the audit firm was last appointed and the dates of rotation of the audit engagement partners;
- Accounting standards - include greater voluntary disclosure and more meaningful management discussion and analysis in the financial reports, with particular focus on the company's capitalisation policies and practices and long-term contractual arrangements such as leases; and
- Shareholder empowerment - disclose the measures the company has in place to ensure provision of equal access to material information through the continuous disclosure regime.
What happens next?
Corporate Governance Council - more to come
The Corporate Governance Council is undertaking a wide-ranging work program to improve Australia's corporate governance. In particular, it will issue detailed statements of best practice principles with which it will expect Australian listed companies to comply for their 2003 annual reports.
Here is the link to the statement issued by the Council on 15 August that explains this in more detail: http://www.asx.com.au/shareholder/pdf/CorpGovCouncil150802.pdf
CLERP 9 - watch out for it soon
In addition, the issues paper for CLERP 9 will be released by the end of this month. It is expected that this will propose changes to the Corporations Act in the areas of financial disclosure, auditing, continuous disclosure and other corporate governance areas. It may also affect the liability regime in these areas.
We will keep you informed of these developments and what they mean for your company and its directors and officers. In the meantime, we can advise you on the best ways to comply with the current requirements, should you wish.
CONTACTS
Please contact the following Partners for further information:
SYDNEY
Tony Bancroft
Partner
T +61 2 9296 2063
tony.bancroft@mallesons.com
Belinda Gibson
Partner
T +61 2 9296 2161
belinda.gibson@mallesons.com
Brian Murphy
Partner
T +61 2 9296 2262
brian.murphy@mallesons.com
Nicola Wakefield Evans
Partner
T +61 2 9296 2348
nicola.wakefield.evans@mallesons.com
MELBOURNE
Michael Kingston
Partner
T +61 3 9643 4179
michael.kingston@mallesons.com
Alison Lansley
Partner
T +61 3 9643 4187
alison.lansley@mallesons.com
Diana Nicholson
Partner
T +61 3 9643 4229
diana.nicholson@mallesons.com
Craig Semple
Partner
T +61 3 9643 4262
craig.semple@mallesons.com
PERTH
Ian Cochrane
Partner
T +61 8 9269 7135
ian.cochrane@mallesons.com
Nigel Hunt
Partner
T +61 8 9269 7080
nigel.hunt@mallesons.com
Leigh Warnick
Partner
T +61 8 9269 7122
leigh.warnick@mallesons.com
BRISBANE
John Humphrey
Partner
T +61 7 3244 8061
john.humphrey@mallesons.com
CANBERRA
Justin Stanwix
Partner
T +61 2 6217 6076
justin.stanwix@mallesons.com