Policy Update
Submission supports NFP sector
In late November last year, AICD provided a submission in response to the Productivity Commission’s draft research report into the contribution of the not-for-profit (NFP) sector. AICD’s submission highlighted that company directors make a significant economic contribution through their voluntary involvement on NFP boards.
The submission strongly supported the recommendation made by the Commission that Australian governments support and promote training for NFP management and boards. In addition to addressing a number of the draft recommendations, AICD:
- Advocated a reduction in the compliance burden for NFPs;
- Recommended that a single regulatory regime cover all NFPs;
- Supported the measurement of the contribution of the NFP sector to the Australian economy;
- Recommended that the contribution made by directors of NFPs be specifically measured; and
- Cautioned against the use of a common measurement framework if it was designed to evaluate the success of individual NFPs or to compare diverse organisations within the sector to make funding decisions.
Taking the lead on board diversity
Following active consultation with the board, Division Councils and the organisation as a whole, AICD has formally adopted a proactive leadership role in addressing board diversity.
In late November 2009, AICD announced a range of new measures designed to focus on the value of a diverse board and in particular, to increase the pool of women available for board positions.
AICD believes these initiatives will have short-term and longer-term effects by addressing the “pipeline problems”, the current obstacles to women gaining positions in senior management ranks that could prepare them for directorship roles. AICD’s measures include:
- New recommendations for boards to adopt and report on, diversity policies and goals for the board and senior management;
- Recommendations for greater transparency in board selection processes and reporting;
- A new AICD mentoring program bringing together senior listed company chairmen and emerging women directors;
- A new AICD scholarship program and other educational initiatives;
- Enhanced AICD database and information services for current and aspiring women directors;
- Additional briefings, seminars and other events tailored to the needs of aspiring women directors; and
- A new AICD publication providing guidance for boards and search professionals that highlights the advantages of diversity and widening the candidate pool.
Insolvent trading consultation paper
AICD recently responded to an Australian Securities and Investments Commission (ASIC) consultation paper outlining proposed guidance to directors on their duty to prevent insolvent trading and on the key principles ASIC considers directors need to take into account when performing their duty to prevent insolvent trading.
With insolvency statistics still trending up, ASIC wants to ensure directors understand they should be taking advice to avoid trading while insolvent, so that creditors are protected. The guidance helps directors understand their duty to prevent insolvent trading and what they can do to minimise the risk of breaching their duty.
Submission to Safe Work Australia
AICD’s submission to Safe Work Australia in relation to the Safe Work Act 2009 (Model Safe Work Provisions) supports stringent OH&S laws with appropriate penalties.
AICD also welcomed a number of aspects of the new provisions and commented on three matters of concern: the impediments to the implementation of a uniform framework; the need for uniform administration of the model act legislative system; and the need for a “due diligence” definition.
Executive Remuneration Inquiry
AICD’s newly appointed chairman, Rick Lee FAICD and its CEO, John Colvin FAICD, attended the Productivity Commission’s public hearings in November 2009, which focused on draft recommendations aimed at improving the regulation and governance of executive remuneration, including the much publicised “two strikes” requirement relating to remuneration reports. The Commission’s final report was delivered to the Federal Government last month.
All AICD submissions and online guides are available under the Policy and Advocacy section of the website at: www.companydirectors.com.au
Rob Elliott FAICD
General Manager
Policy and General Counsel
AICD
FAQ of the month
Question
Our organisation is planning its board meetings for the year and would like to see a template for a board calendar?
Answer
A board calendar is a useful tool because it ensures the board looks at key issues at appropriate times throughout the year, ensuring strategic items do not get missed. It gives a sense of purpose for the year, indicating significant items that are scheduled for board meetings and thereby increasing efficiency.
Drafting the annual board calendar will take some time to ensure its accuracy and completeness and the timing of each item within the calendar will vary from company to company, depending on its financial year-end date, industry, size etc.
A sample board calendar is provided here.
