All articles in Volume 12 Issue 24

Repeal bill passes lower house

leadshotweb 10 dec

The 100-member rule, which enables 100 shareholders to call an extraordinary general meeting (EGM), may finally be heading for extinction, following the passing of a bill to repeal the rule by the House of Representatives.

The Corporations Legislation Amendment (Deregulatory and Other Measures) Bill 2014 was passed with bipartisan support from the Labor party. The bill will be presented to the Senate in February 2015, where it is also expected to pass.

The move is a positive one for the Australian Institute of Company Directors, which has long advocated the abolition of the rule, which has been used by activist groups to pressure listed companies and promote non-business agendas.

Its removal would only affect the ability of a small group of investors to call an EGM, which can be extremely costly for companies.

It does not impact any other rights, such as the ability of 100 shareholders to put a resolution on an annual general meeting agenda, and shareholders with at least 5 per cent of votes will still be able to requisition an EGM.

Company Directors has championed the removal of the rule citing it as “an excellent example of deregulation that would allow business to operate more efficiently, without compromising the rights of shareholders”.

The legislation also included some changes to remuneration reporting, including limiting the preparation of remuneration reports to "listed disclosing entities" rather than to all “disclosing entities”.

Diversity scholarship winners announced

Seventy new recipients of diversity scholarships under a joint Australian Institute of Company Directors and federal government program have been revealed.

More than 1,300 women from all states and territories applied for the latest scholarships, which will enable them to complete either the Company Directors Course or the Mastering the Boardroom program.

The 70 winning recipients were unveiled by the Minister Assisting the Prime Minister for Women, Senator Michaelia Cash. They represent a broad spectrum of the community, from ASX listed companies to not-for-profit organisations and the political world.

Each was selected based on their experience and leadership potential by a committee of representatives from Company Directors and in addition to completing one of the courses, each winner will also receive a free 12-month membership to Company Directors.

“The success of our joint program continues to go from strength to strength,” said John H C Colvin, CEO and managing director at Company Directors.

“Since its inception in 2010, 240 outstanding women have been awarded scholarships to complete our courses and many have subsequently gained board positions.”

The final 40 scholarships in the third round of the program will, for the first time, be awarded to females in male-dominated sectors such as mining. Applications are due to open in February 2015.

Earlier this year, 30 women from rural and remote areas were also granted scholarships.

Click here to view the list of winners.

Preparing for 2015

Boards look set to face their biggest test since the global financial crisis (GFC) in the coming year, with a sluggish global economy, regulatory confusion, and higher volatility likely to be a recurring theme for directors.

The latest issue of Company Director magazine has warned directors and high-performing boards to plan for heightened levels of change and greater volatility by focusing on how their organisations would adapt to significant, unforeseen, and fast change. 

It has also urged directors to consider whether their executive teams are well suited to the task.

Key areas of focus in the next 12 months should consider how a trillion-dollar money printing experiment by central banks will end; whether Europe will have another financial shock; and if Chinese growth will disappoint. In addition, war in parts of the Middle East, a greater terrorism threat, volatile commodity and currency markets, and the Ebola virus all add to the geopolitical risks facing business and boardrooms. 

Last year, directors nominated the impact of technology on business models, innovation, the Australian economy, the new federal government, mergers and acquisitions, board diversity and executive pay as key governance challenges. 

While each of these are also relevant today, the great challenge for next year will be dealing with the unknown rather than the known, with the top five board challenges for 2015 cited as organisational culture, executive leadership, the global economy, growing uncertainty and the resources sector.

To read the full article, please see the latest issue of Company Director magazine. 

Harvard study sheds light on inequality

A highly influential study of Harvard Business School graduates has revealed some fascinating insights into the persistence of the gender gap among business leaders.

By using the graduates from the prestigious business school, the researchers hoped to eliminate any sampling errors that may be hidden by different research subjects’ academic experience. This group was regarded as high-potential leaders.

The report divided the groups into three age groups – Millenials, Gen X and Baby Boomers. Among the Gen Xs and Baby Boomers, it was unsurprising to find that they saw success as “family happiness, relationships, and balancing life and work, along with community service and helping others”.

Among the HBS graduates who worked full-time, men were significantly more likely than women to have direct reports, profit and loss responsibility and senior management positions.

The reason for this gender gap is often given as women “opting-out” to have children or become the primary caregiver. However, the report debunked this reasoning.

“We considered whether graduates had gone part-time or taken a career break to care for children, and how often. None of these factors explained the gender gap in senior management," the report said.

Controversially, the researchers contended that many women “opt-out” as their work was unfulfilling and much of this was due to the conversion to part-time or flexi arrangements during which, work challenges were reduced. The research showed no link between time away from a career and gender imbalance.

“In fact, both men and women in top management teams were typically more likely than those lower down in the hierarchy to have made career decisions to accommodate family responsibilities," the research said.

The researchers suggested that companies could do more than simply offering flexi-time and family-friendly policies. ”Women want more meaningful work, more challenging assignments, and more opportunities for career growth.”

And in a rather confronting, controversial position, they advocated that young women should “make their partner a real partner.” A truly egalitarian relationship may mean that it is less likely that each partner falls back to a traditional default position, which it appears may contribute to the persistence of the gender gap, it said.

To read the full analysis, click here.

Small business to save millions

Employers may benefit from $20 million in red tape savings when the government expands access to the Small Business Superannuation Clearing House (SBSCH) on 1 July 2015. 

This means all businesses with an annual turnover below the small business entity turnover threshold, which is currently set at $2 million, will be eligible to access SBSCH.

The SBSCH is a free online service helping small businesses meet their Superannuation Guarantee (SG) obligations. It allows employers to pay superannuation contributions in one transaction to a single location and helps to reduce red tape and compliance costs.

Since the Abbott government transferred the SBSCH to the Australian Taxation Office, the number of small businesses enrolled to take advantage of the service has increased by 24 per cent. 

Overall, it is thought the change will benefit approximately 27,500 small businesses and result in an annual compliance cost saving of over 76,000 hours. 

Announcing the reforms, Minister for Small Business, the Hon Bruce Billson, said the government was also removing the obligation on business to offer the employees’ choice of fund when it does not make sense to do so.

“This measure will not only reduce unnecessary red tape but it will also reduce the number of employers who become liable for heavy penalties after inadvertently neglecting to provide choice," he said. 

Aussie generosity rising

Australia has climbed to sixth place in a global report measuring contributions to charity around the world.

The ranking has put Australia hot on the heels of New Zealand, which placed as the fifth most generous nation behind the leader, Myanmar. The US, Canada and Ireland were second, third and fourth, respectively.

According to the World Giving Index 2014, a study of global charitable behaviour from the Charities Aid Foundation (CAF), Australia’s World Giving Index score has increased one percentage point to 56 per cent on last year.

The index, which is based on surveys in 135 countries, looks at three measures of giving: the percentage of people who give money to charity, volunteer their time or help a stranger in a typical month.

It found that Australians are growing increasingly generous, with the number of people saying they had helped a stranger rising by over 300,000 in the last year.

The number of Australians volunteering also increased, rising three percentage points since last year’s report. This is despite the fact that the percentage of people donating money fell by one percentage point to 66 per cent, the study found.

Commenting on the study, Lisa Grinham, CEO of CAF Australia, said: “From previous reports we’ve seen Australians jump in to help in times of global crisis to support those in need.”

Globally, the World Giving Index report showed that more people are giving their time to good causes and performing acts of kindness, with the number of people who helped a stranger in 2013 rising 226 million year-on-year. Similarly, 132 million more people are volunteering.

In contrast, the study noted that Yemen ranked as the least generous country, with Venezuela just slightly ahead.

Just five of the countries in the top twenty are members of the G20, the group representing the world’s largest economies. Eleven G20 countries are outside the Top 50 and three of these are outside the Top 100.

The full report can be found here.

AIRA updates  guidelines 

The Australasian Investor Relations Association (AIRA) has released an updated version of its best practice investor relations guidelines and has called on companies to lift the bar in communicating important information to shareholders.

The fourth edition of AIRA’s guidelines also calls for live webcasts of annual general meetings, including question and answer sessions. It also recommends that companies consider providing a full transcript of proceedings, including formal speeches and presentations, along with relevant question and answer exchanges of all significant briefings.

In addition, the guidelines suggest that when it comes to investor days and analyst briefings, all questions and answers should be monitored for market-sensitive information and be released immediately to securities exchanges if any inadvertent disclosures are made. 

AIRA also suggests all presentations be released prior to the investor day commencing, and uploaded to company websites to enable analysts and investors to digest the information before trading commences. 

“We would like to see listed entities tell all shareholders exactly when they are scheduling investor briefings, presentations and webcasts so that more people can find out in a timely manner exactly what is happening,” said AIRA’s CEO, Ian Matheson FAICD.

“Such routine details are not always made widely available, but it is essential to do so if all investors are to be kept fully informed. The details can easily be posted on a company’s own website and more particularly, lodged with ASX and/or NZX.”

Matheson added that regulators have made it clear that they want all investors to be provided with all price sensitive information in a timely manner; therefore it was up to companies to use the communications tools at their fingertips to engage effectively with as many of their shareholders as possible.

Mirvac Group boosts board

Christine Bartlett MAICD and Samantha Mostyn have been appointed non-executive directors at Mirvac Group, taking the number of women on the company's eight-member board to four.

Bartlett is currently the executive general manager of asset servicing at National Australia Bank and the former CEO of Jones Lang LaSalle Australia.

Mostyn has extensive experience as a non-executive director and corporate adviser and currently sits on the board of Virgin Australia, Transurban, and CoverMore. She has also previously held senior positions at IAG and Optus.

Bartlett and Mostyn replace James MacKenzie FAICD and Marina Darling FAICD, both of whom have resigned from the board this year. 


Meanwhile, iron ore mining company, BC Iron, has cut the size of its board from eight to five as it looks to cut costs in the sharply lower iron ore price environment.

Three directors, including former managing director Mike Young MAICD and non-executive directors Malcolm McComas FAICD and Peter Wilshaw MAICD, have resigned with immediate effect.

The changes leave non-executive chairman Tony Kiernan FAICD, managing director Morgan Bell and three non-executive directors (NEDs), Brian O'Donnell MAICD, Terry Ransted and Andy Haslem on the board. 

The BC Iron board has also announced it will reduce the fees of the remaining NEDs with effect from the beginning of 2015.

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