Vol 7 Issue 18 September 23 2009

  • Date:23 Sep 2009
  • Type:Boardroom Report

Creating a single voice for NFPs

The not-for-profit (NFP) sector would benefit from having a Federal Government minister, as well as a peak industry association, overseeing its interests.

These were the views of senior executives from a diverse group of NFP organisations who attended a recent forum in Sydney to review their common issues. The aim was to create “a single voice” when responding to the draft report expected to be released in early October by the Productivity Commission (PC) on its inquiry into the contribution of the NFP sector.

In defence of the conglomerate

Wesfarmers’ success was because of its diversification and not in spite of it, Wesfarmers managing director and CEO Richard Goyder FAICD argued at an AICD lunch in Sydney yesterday.

He noted that over the past 10 years, Wesfarmers had produced a total return, on average, of 13 per cent per year compared to the All Ordinaries Accumulation Index’s return of nine per cent.

Goyder attributed Wesfarmers’ solid performance to three factors:good people, very clear strategic objectives around shareholder returns and a strong emphasis on reputation.

A warning for directors and their advisers

A recent court case reinforces the role and responsibilities of directors in insolvency situations and sounds some warnings to advisers about facilitating illegal activities.

The New South Wales Supreme Court recently found that eight directors of unrelated companies acted in breach of the Corporations Act by engaging in what the Australian Securities and Investments Commission (ASIC) regards as illegal “phoenix” activity.

Employers in limbo on pay and share schemes

Employers remain in limbo, unable to finalise executive remuneration packages and employee securities schemes, until legislation and various inquiries into these areas are finalised, says Martin Morrow, partner, Equity Based Compensation and Executive Remuneration, at KPMG.

The Government issued a Policy Statement, setting out the final tax treatment of share and rights acquired under employee share schemes, on 1 July 2009 and then released an exposure draft of its proposed legislation on 14 August.

Audit boards come under the microscope

Audit boards are being scrutinised by GovernanceMetrics International (GMI), which rates the corporate governance practices of companies in 45 countries.

Releasing new ratings for its entire universe of 4,207 companies today, GMI notes it has added a number of new metrics that enable it to more closely examine the level of independent members of audit boards as well as the involvement of executives and employees on this oversight body. GMI is also now tracking the levels of financial expertise and industry knowledge on audit boards to provide a broader perspective of how audit boards are made up.

 

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