The Australian Institute of Company Directors (AICD) responded to consultation papers issued by the ASX (Updating the ASX’s admission requirements for listed entities) and the Australian Securities and Investments Commission (ASIC) (Improving disclosure of historical financial information in prospectuses: Update to RG 228) in July.The papers aim to improve the quality of information presented to investors in prospectuses, and to enhance the quality and integrity of an initial public offering in order to remain internationally competitive.
The AICD was generally supportive of the proposals in both papers. However, in the ASX paper we argued that the higher admission thresholds will limit the ability of start-up and early-stage enterprises to access capital through an ASX listing. We therefore encouraged the ASX to apply appropriate discretion in the application of its thresholds and to monitor the impact of its proposed changes to ensure they do not impede the growth of innovative businesses.
The ASIC paper sees the introduction of general guidance with examples, when exercising its discretion. This general guidance applies to situations where two-and-a-half or three years of historical information is not required, and where ASIC will accept an audit modification or emphasis of matter. We welcome this general guidance with some further improvements.
Gender diversity work
The AICD continues to advocate strongly for gender diversity on boards and recently released the 30% by 2018: Gender diversity progress report. The report revealed new statistics showing that 41 per cent of all directors appointed to ASX 200 boards in 2016 were women (as at May 2016), versus 5 per cent in 2009 when the AICD began compiling statistics. Forty-five ASX 200 boards have attained or exceeded the AICD target of 30 per cent female representation.
The 30% Club, an international initiative for which the AICD is the Australian secretariat, held events in Melbourne and Sydney in July that provided an opportunity for asset owners, Australian equity investment managers and other key influencers working in the funds management community to connect with CEOs and chairs of ASX 200 companies.
The events promoted the goals of the 30% Club and the importance of working together with investors to increase the number of women on ASX 200 boards. Keynote speakers included Margaret Jackson AC FAICD, chair of Spotless Group; David Neal, managing director of Future Fund; Kevin McCann AM FAICD, chair of Citadel Group and past chair of Macquarie Group Limited and Richard Brandweiner, chief investment officer at First State Super. The speakers urged the investment community to support the diversity initiatives of the 30% Club and ensure diversity featured in the conversations they had with CEOs and chairs of ASX companies.
NFP Chairs’ Forum
In July, the AICD convened a meeting of the Not-for-profit (NFP) Chairs’ Forum in Melbourne. Established earlier this year, the forum comprises chairs from a cross-section of the Australian NFP sector.
The forum considered the content of the AICD’s national reform document: Governance of the Nation: A Blueprint for Growth. The document includes a chapter on a partnership approach between government and the NFP sector, calling for five-year funding cycles for NFPs and national harmonisation of regulatory settings. The forum discussed how best to advocate for the reforms, recognising the need for the sector to be unified and clear on any call for reform. The forum will develop a “communique” outlining reform priorities which will be released later this year.
QLD environmental protection
In late April 2016, the Environmental Protection (Chain of Responsibility) Amendment Act 2016 (Qld) gave the Queensland Government Department of Environment and Heritage Protection (DEHP) greater powers to protect Queensland sites. The new powers permit the DEHP to issue an environmental protection order (EPO) to a company’s “related persons” in certain circumstances.
The DEHP has formed a working group to assist with the preparation of the “statutory guideline” that will sit under the Act, and the AICD has joined the group. The guideline will elaborate on who may be considered a “related person” of a company for the purposes of the new laws and the circumstances in which they may be issued with an EPO. Other stakeholders involved include the Australian Bankers’ Association, Queensland Resources Council, Australian Petroleum Production & Exploration Association, Australian Restructuring Insolvency and Turnaround Association, Queensland Law Society and the Environmental Defenders’ Office.