Welcome to the November 2013 issue of GuerdonNews®

In this month's issue we:

• Observe that draft ASX Governance Principle requirements for disclosure of board skill matrices present a conundrum
• Wonder what the prospect of new ownership of ISS will mean for its clients in Australia
• Note that, unlike the Shaky Isles’ 41 Melbourne Cup winners, their director pay has stood still
• Provide more detail on UK discussions to regulate clawback and remuneration committee membership that could filter to Australia

We conclude with the latest on executive and director remuneration disclosure updates available on the GuerdonData® on-line database and references to Guerdon Associates in the news media.

Implications of board skills matrix disclosure

Revised ASX Governance Principles present issues

One of the more contentious recommendations of the ASX Corporate Governance Council’s draft principles and recommendations is Recommendation 2.5, which stipulates that:

“A listed entity should have and disclose a statement as to the mix of skills and diversity that the board is looking to achieve in its membership.”

The commentary around this recommendation emphasises that this information about proposed skill mix and diversity is “useful…..for investors and increases accountability for the board on both matters.”

However, there is also a downside associated with publicly disclosing such potentially sensitive information.

ISS to change ownership?

MSCI seeking to unload the crown jewels

MSCI Inc, which owns Institutional Shareholder Services Inc. ("ISS"), is exploring strategic alternatives regarding ISS. The news comes shortly after a change in the ownership of arch rival, Glass Lewis

New Zealand director fees unmoved

Pay conservatism prevails

The recently released 2013 Directors’ Fees Report, published by dsd Consulting Ltd (dsd) in conjunction with the Institute of Directors in New Zealand (IoD) highlights a sense of cautiousness in the New Zealand market in regard to Director remuneration.

It may also reflect a relatively benign and cautious approach to governance changes.

UK’s FRC to consult on requirements for true executive pay “clawback”

Remuneration committee membership also questioned

The UK Government has requested the Financial Reporting Council (“FRC”) to consult on three specific proposals, with the FRC to determine whether any further changes to the UK Corporate Governance Code (“the Code”) are required.

The FRC is now considering strengthening this to include a “comply or explain” presumption that companies have appropriate provisions in place to support clawback. Consideration is also being given to adopting the terminology currently used in the UK Remuneration Regulations which distinguishes between recovering vested pay (i.e. true “clawback”) and withholding or forfeiture of unvested pay (i.e. “malus”).

Latest GuerdonData® Updates

Updates to GuerdonData® include disclosures from the following 22 companies:

Austin Engineering Limited, Bank of Queensland Ltd, Cabcharge Australia Ltd, Cudeco Limited, Charter Hall Group, Energy World Corporation Ltd, Fleetwood Corp Ltd, Harvey Norman Hldgs Ltd, MACA Limited, Myer Holdings Ltd, Orocobre Ltd, Premier Investments Ltd, Red Fork Energy Ltd, Resolute Mining Ltd, Sundance Resources Limited, Ten Network Hldgs, TPG Telecom Ltd, Troy Resources Limited, Virgin Australia Holdings Ltd, Western Desert Resources Ltd, Wesfarmers Ltd, and Woolworths Ltd.

Executive and director remuneration data from all ASX 300 companies on GuerdonData® is available to any subscriber. Visit our website for more information on GuerdonData®.

Assess how easily you can find out director and executive pay information by viewing our 6 minute demo. Click on the “More Info” button below.

Guerdon Associates in the news

“Directors at Suncorp told to hold stock where job is”, Liam Walsh, The Courier Mail, 22 October 2013, p. 40