AICD statement on proxy advice regulations

The Australian Institute of Company Directors (AICD) is disappointed by news that a regulation to increase the transparency and accountability of proxy advice will cease to have effect.

Today, a move to have the regulation disallowed was passed by the Senate.

In December, Treasurer Josh Frydenberg announced new rules on proxy advisors through the Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021.

AICD Managing Director and CEO Angus Armour, said, “The AICD respects the Parliamentary process that has resulted in today’s decision.

“However, the AICD has long argued for licensing of proxy advice and we are disappointed that influential players in Australia’s financial markets will continue to benefit from a 20-year-old exemption from AFSL licensing,” said Mr Armour.

"The key substantive obligations of AFSL license holders are difficult to argue against: that licensees provide their financial services efficiently, honestly and fairly; have adequate conflict management arrangements in place; and comply with financial services laws.”

“Proxy advice is a profitable, global industry. Given its highly influential role in Australian markets, it is appropriate that proxy advice is regulated to these reasonable standards.”

“The AICD also supports increased transparency of institutional investor voting behaviour. This is especially relevant for superannuation funds who which benefit from a compulsory system that entrusts them with responsibly managing Australians’ retirement savings, and where there is a wide range of reporting practices.”

The AICD will continue to advocate for sensible reforms that support the overall governance of our listed markets.

Media Contact: Maegen Sykes 0439 167 567