The Australian Corporate Governance Code is up for review. Under the auspices of the Australian Stock Exchange (ASX), a number of amendments are under consideration, most notably improved disclosures about gender diversity and executive pay.

Diversity

The diversity proposals are response to a highly critical report published by the Corporations and Markets Advisory Committee (CAMAC) in March 2009. The report  criticised Australian companies for whose female board member representation was a mere 8.3%  - lower than four years ago.

Unlike France and Norway,  Australia is not looking for quotas but instead is taking a three pronged approach disclosure approach as suggested by CAMAC:

1. Nomination committee: explicit reference to board diversity issues in narrative reporting
2. Candidate selection: companies are expected to take a "structured approach" to identifying a pool of potential candidates; and
3. Better information for shareholders: board candidates profiles to  be expanded to cover a statement by the board of the skills it is looking for in any new appointment to the board and the steps taken to ensure that a range of candidates was considered.

Remuneration

The Productivity Commission's report on remuneration has lead to the introduction of  an ‘if not, why not’ recommendation specifying the composition of the remuneration committee should be comprised exclusively of non-executive directors.

E-Comms 

The proposals introduce a new recommendation which suggests that companies should address concerns about selective disclosures through more effective use of the Internet or conference calls and give more advance notice to interested parties.  

Investors have until 31st May 2010 to submit their comments on proposals. Subject to final approval the Listing Rules will be effectove for companies reporting after 1st January 2011.

Links

CAMAC Board Diversity Report >>

ASX Governance Code Amendments >>