Vol 7 Issue 4 March 13 2009

  • Date:13 Mar 2009
  • Type:Boardroom Report

Non-statutory profit reporting principles released

AICD and the Financial Services Institute of Australasia (Finsia) have released a set of principles designed to encourage greater consistency and transparency in non-statutory profit reporting.

The principles aim to improve stakeholder understanding of company results – both within companies from one results announcement to the next and across companies within the same industry.

Is regulation the answer?

The role of regulation in preventing another global financial crisis was hotly debated at the ASIC Summer School in Sydney last week, including by Minister for Superannuation and Corporate Law Nick Sherry and Dr John Stuckey, a senior advisor at McKinsey & Company and chair of ASIC’s External Advisory Panel.

Sherry believed the “products of what has been called financialisation or financial innovation” sat at the very heart of the global crisis and that these “highlighted the very real cracks in the regulation of the world’s financial systems”.

“Regulatory arrangements have frequently failed to keep pace with the globalisation of financial activity and we have seen a failure of internal governance within financial institutions, and a failure of external oversight to recognise and respond to risks,” he said.

Climate change legislation on its way

The Government has demonstrated its resolve to tackle climate change despite the global financial crisis with the release of exposure draft legislation and explanatory materials for the Carbon Pollution Reduction Scheme (CPRS) this week.

So says Dr Karl Mallon, a director at Climate Risk, who notes that the CPRS is likely to have a discernable impact on the economy. “Even companies with no direct exposure to carbon emissions will feel the impact through electricity and fuel prices,” he warns.

Guarding against cartel conduct

Directors should review the adequacy of their corporate governance and compliance systems ahead of changes to the Trade Practices Act (TPA) which impose criminal sanctions for cartel conduct.

So warns Richard Dammery FAICD, corporate partner at Minter Ellison and a director of Safetrac, a leader in online compliance services.

He notes that cartel risks apply not only to directors of large corporations, but also to small companies and even directors of not-for-profits. The latter, he says, are subject to the TPA to the extent that their activities can be characterised, even on an ancilliary basis, as those of a trading corporation.

Global governance principles under review

The International Corporate Governance Network (ICGN) is reviewing its global corporate governance principles to take into account changing market and economic conditions.

The principles were last revised at ICGN’s annual conference in London in July, 2005, to incorporate changes made to the Organisation for Economic Co-operation and Development’s Principles of Corporate Governance and to include additional principles of particular concern to the ICGN and its members.



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