All articles in Volume 13 Issue 10

ASEAN overlooked

Australian companies and directors are missing a plethora of opportunities in the ASEAN region, according to H. E. Rod Smith, the Australian High Commissioner to Malaysia.

Speaking at the annual Australian Institute of Company Directors conference in Kuala Lumpur, Smith said directors are missing a trick when it comes to capitalising on the flourishing Asian Century by focusing solely on global powerhouses China and India.

“ASEAN and the Asia Century is not a new concept, however, these days the focus has been very much about China and India, yet ASEAN is in fact the quiet achiever.

“Made up of 10 countries, it is the seventh largest economy globally and presents Australian business with a powerful demographic dividend. And with the introduction of the ASEAN Economic Community (AEC) at the end of the year, the opportunities will be even greater,” he said.

The AEC aims to bring about regional economic integration by the end of 2015 by creating a single market with free movement of goods, services, investment, skilled labour and freer flow of capital.

“This equals opportunities for Australian business across many service sectors, such as legal and infrastructure, to name but a few,” he said.

Singling out Malaysia as an “exemplary ASEAN growth story”, Smith highlighted the country’s sustained GDP growth of five per cent over the last 20 years, ambitious development plans and the country’s target to achieve developed economy status by 2020.

He added that this presents tremendous opportunities to unlock the untapped finance in infrastructure, notably in the Islamic finance market.

“The potential of the Malaysian market is great and can act as a gateway to even greater ASEAN opportunities in the region,” he said.  


Directors told to seize opportunity

The Australian directorship community has been warned against failing to act swiftly and bravely on the opportunities afforded by the fast-growing ASEAN region and the threats faced by business by digital disruption.

Speaking at the Australian Institute of Company Directors’ (AICD’s) annual conference in Kuala Lumpur, Michael Smith FAICD, chair of the AICD said myriad factors such as the Chinese economic slowdown, the end of the mining boom and the growing threat of digital disruption means directors face significant challenges in ensuring they stay ahead of the curve and safeguard the interests of their companies and the broader economy.

“The world of leadership changes enormously quickly, and what we know becomes dated very quickly,” he said.

“The ongoing, exciting revolution that is happening here in Asia coupled with the risk we face from cyber threat means if we don’t change fast, we are off the pace.”

Smith added that there is an opportunity for directors to have a profound effect on Australia by making informed decisions that are in the best interests of business and the economy.

“Our intellect as directors is a collective intellect, we search for the best way to keep the organisations that we lead safe and more prosperous. To do this, we have to be personally brave.  This is not all about consensus, but having our own informed perspective and being a constructive part of an argument.

Smith pointed to the opportunities arising in the ASEAN region as one not to be overlooked, particularly as many directors remain optimistic about the Asian economy. In contrast, 70 per cent of directors expect the domestic economy to be weak in the next 12 months, according to the AICD’s latest Director Sentiment Index.

“As directors, we are powerful and our decisions mean we can make it safer and better for all stakeholders. If we are better, we make our organisations better and we make our society better,” he said.


Governance key for ASEAN

Corporate governance forms an important policy priority in the efforts to strengthen ASEAN’s overall business ecosystem and to ensure growth in the region remains sustainable in the long term.

In a keynote address to delegates at the annual Australian Institute of Company Directors’ conference in Kuala Lumpur, Datuk Ranjit Ajit Singh, chairman of the Securities Commission Malaysia, said the ASEAN region could learn from developed markets such as Australia when it came to developing corporate governance policy.

“Policymakers continue to face significant challenges in this regard, the most persistent of which being the broad perception that corporate governance is first and foremost a regulatory agenda,” he said.

“An unfortunate corollary is that efforts to drive improvements in corporate governance tend to be top-down and government driven, [so there is a] propensity by the private sector to opt for compliance in form rather than substance.”

Singh added that what the ASEAN region could learn from developed markets such as Australia is how this perception may be addressed to ensure that corporate governance will be embraced as a bottom-up, private sector-driven market agenda.

“Voluntary practices such as ‘black-sheeping’ of poorly governed firms are important in building a genuine and enduring culture of good governance and cannot be coerced into existence by sheer regulatory might,” he said.

In order to encourage greater corporate governance practices and attract greater investment in the region, Singh said the Malaysia Corporate Governance Blueprint has been created proposing the importance of three self-reinforcing pillars of governance, namely regulatory discipline, market discipline and self-discipline.

In addition, he added that the ASEAN Capital Markets Forum has introduced the ASEAN Corporate Governance Scorecard, which enables well-governed regional companies to be showcased to investors and provides an avenue for public listed companies to assess their own adherence for good corporate governance practices.

“Malaysia and ASEAN are open for business and we strongly encourage Australian businesses to explore the opportunities that we have to offer, not only commercial linkages, but also the sharing of knowledge and best practices in building a vibrant private sector,” he added.


Calls for QLD women on boards

Premier Annastacia Palaszczuk has announced a new campaign to encourage more Queensland women on boards.

As part of the initiative, a print campaign is set to run calling for expressions of interest to build a register of nominees to fill vacancies as they arise across 320 government bodies.

“My government is committed to ensuring women are represented at all levels of leadership, on boards and committees for government bodies,” Palaszczuk said.

“I’m putting a call out to women across Queensland to take that next step, to represent their communities.

“Queensland can only benefit from accessing the expertise, skills, perspective and knowledge which women bring to the decision-making process.”

Currently, 31 per cent of government board positions are filled by women.

Premier Palaszczuk said the register would build a bank of women available to make government boards truly representative.

The advertisements will call for women with expertise across a range of disciplines, including:

  • Corporate finance or economics.
  • Corporate governance or law.
  • Commercial business.
  • Human resources.
  • Community and stakeholder engagement.

Queensland Government bodies are a critical link between government and the wider community. They range in scale and character from providing policy advice, to overseeing multi-million dollar government trading enterprises.

“It is time for Queensland to benefit from this wealth of untapped experience, and to set a positive example for industry to follow,” Palaszczuk said.


Tax reprieve for small business

The Australian Taxation Office (ATO) has published guidance on the Government’s proposal to allow small business to immediately deduct each asset that costs less than $20,000.

Deputy Commissioner Steve Vesperman said while legislation to give effect to the proposal has not yet been enacted it will apply to all small businesses with a turnover of less than $2 million.

The legislation will backdate eligibility to 7:30pm AEST, 12 May 2015, so that assets acquired on or after on the Budget announcement will be eligible for the concession.

Small businesses taking advantage of the new measure will need to pool other assets valued at $20,000 or more and depreciate these assets at a rate 15 per cent in the first year and 30 per cent each year thereafter.

“It is also important that small businesses keep records of their purchases to claim their deduction,” Vesperman said.

“The ATO will be working with small businesses looking to use the immediate deduction to ensure they are appropriately claiming it. We will be monitoring claims of this nature and following up on high risk cases,” he said.

Small businesses can get the latest tax updates and information via the ATO’s new small business newsroom service. Subscribers to the service receive email updates on the latest news every three to four weeks.

Subscribers can also choose to stop receiving general tax information by mail and read it in the newsroom instead. Small businesses can check key dates and download them to their own calendars.

More than 45,000 small businesses have subscribed to the service which can be found at ato.gov.au/sbnews.


Chair’s mentoring program open

Applications are now open for the Australian Institute of Company Directors’ (AICD) Chair’s Mentoring Program, which has been designed to introduce highly experienced and qualified emerging female directors to chairs and experienced directors from S&P/ASX 200 organisations.

The program aims to help emerging female directors to:

  • Gain knowledge and skills that will assist them with director appointments, as well as developing their careers generally.
  • Increase their practical knowledge of governance issues in listed companies and how listed company boards operate.
  • Gain valuable insight, advice and guidance on the process of selecting and appointing new directors.
  • Develop connections with influential business leaders.

The program is also designed to enhance the connections of chairs and experienced directors of ASX 200 listed companies with a pool of experienced and skilled women who may be suitable for director roles.

The AICD will be responsible for managing the application process and the successful applicants will be selected by an advisory selection committee comprising representatives from AICD, senior ASX 200 directors and other key stakeholders.

Applications open Wednesday 27 May and close on Monday 15 June. All successful applicants will be notified during the first week of August with the first launch occurring on 12 August.

Elizabeth Proust AO FAICD, chair of Bank of Melbourne said: "I have been involved in the last two of the AICD's mentoring programs. For me, it's both an opportunity to help other women understand the role of a director, and to learn from the next generation of female directors. I know that I've received at least as much out of the program as have hopefully the women I have mentored."

David Crawford AO FAICD, chair of Lend Lease and a returning mentor on the 2015 program further commented: “Participating in the mentoring program has enabled me to meet a large number of extremely well-qualified females who have both broadened my knowledge base and demonstrated the significant contribution that they can make to Australian companies. As such I strongly support the institute's drive to ensure 30 per cent minimum female board representation by 2018 for ASX 200 companies and for all companies in the future.”

All applications must be submitted online along with a copy of their resume via the Chair's Mentoring Program page on AICD's website. 


Auditor General called to inquiry

The senate inquiry into the Department of Social Services tendering process has called on the Auditor General to investigate and make changes to the Commonwealth Grants Guidelines.

The report also called on the Auditor General to examine “the effect the truncated timelines of the 2014 process had on poor engagement with the not- for-profit (NFP) sector and stakeholder disenfranchisement”.

The inquiry, Impact on service quality, efficiency and sustainability of recent Commonwealth community service tendering processes by the Department of Social Services was initiated by WA Greens Senator Rachel Siewert after the Federal Government's $1 billion cuts to community services in 2014.

It received 97 submissions from a range of peak bodies and community service providers.

NFP peak bodies and leading welfare organisations have vented their anger and frustration over the Department of Social Services’ “open tender” process in which just 15 per cent of applications for funding were successful.

The inquiry was told that the Department of Social Services received 5,572 applications from welfare groups seeking $3.9 billion over four years when there was just $800 million available.

As a result, a number of peak bodies and advocacy groups learned that they had been defunded as part of the $240 million budget cuts to social services − two days before Christmas.

The interim senate report tabled in Parliament said an Auditor General review should include an assessment of how the process fared against each of the Commonwealth Grants Guidelines seven key principles:

  • Robust planning and design.
  • Collaboration and partnership.
  • Proportionality.
  • An outcomes orientation.
  • Achieving value with relevant money.
  • Governance and accountability.
  • Probity and transparency.

The inquiry committee recommended that the Auditor General also consider the merit of a two-stage process for discretionary grant funding applications, beginning with an expression of interest (EOI) followed by a closed grant round for successful EOI applicants; and whether there is merit in setting a standard that requires that new contracts are finalised within a minimum time prior to the end of existing service contracts.

The inquiry has been given an extension to deliver the full report by 19 August 2015.

Read the interim report here.


Ovarian Cancer appoints CEO

Ovarian Cancer Australia has appointed FAICD as its new chief executive officer (CEO).

Hill has over 20 years experience in the not-for-profit sector and is the former CEO of Fight Cancer Foundation. She joins Ovarian Cancer Australia from Stride Foundation where she was CEO for four years.

Hill is currently a non-executive director at the Freemasons Foundation Victoria, one of two non-freemasons appointed to the board.

Ovarian Cancer Australia has also recently appointed three new board members; Tracey Curro, head of SHK Executive Search’s communications and digital practice; Jo-Ann Hicks, director of strategy and corporate development at Mi9; and Sarah Adam-Gedge GAICD, corporate vice president and managing director at Avanade Australia.

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Virgin Australia has selected Caltex Australia chairman and Westpac director Elizabeth Bryan AM FAICD as the successor to long-serving chairman Neil Chatfield FAICD.

Australia's second-largest airline has been searching for a new chair since Chatfield announced his intention to step down after seven years in the role. He was appointed as a Virgin director in May 2006. Just over a year later, he was appointed chair.

Bryan, who is also a director of Insurance Australia Group, has previously been CEO of Deutsche Asset Management Australia and chair of UniSuper.

Bryan was handed the reins from Chatfield on 20 May. 


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