ASX changes:  Will they affect you?

Throughout the year there have been various articles in the media and industry journals highlighting the proposed changes to the ASX Listing Rules and the Corporate Governance Council’s Corporate Governance Principles and Recommendations (ASX Changes). These proposals are based upon reports released by the Corporations and Markets Advisory Committee and the Productivity Commission.

The proposed changes are in response to the recent financial crisis and the increase in cases involving independence and conflicts of interest. The theme of these changes is to increase ‘transparency’, communication and disclosure to investors and potential investors.

In recent years, there has been increasing focus on the bias of positions on Boards and in senior management positions towards men. Debate has intensified around Board composition with many arguing that they should be balanced with women to provide a different perspective and skill set to the Board. Recent research indicates that the proportion of women on boards of the ASX 200 public listed companies in Australia is lagging behind the numbers in equivalent companies internationally (including in the UK, USA, Canada, New Zealand and South Africa).

As a result, the following changes are being incorporated:

New Listing Rules
Securities Trading Policy [effective on or after 1 January 2011]
Composition of Remuneration Committees (S&P/ASX 300 Index) [effective on or after 1 July 2011]

Corporate Governance Principles & Recommendations
(Effective financial years commencing on or after 1 January 2011)
Diversity
Composition of Remuneration Committees
Removal of Securities Trading Policy [refer to new ASX listing rule above]
Briefings

If you are a company secretary, CFO or have responsibility for the above areas, you need to be familiar with these changes and how they will impact your current internal reporting systems, disclosures within your annual reports and websites, and advise the Board/committees.

For further details on these changes please refer to our TA Alert 2010-58.

Should you wish to discuss these changes further, please do not hesitate to contact your usual Grant Thornton advisor or a member of the National Audit Support team at NAS@grantthornton.com.au 

Author: Keith Reilly, January 2011

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