Last Thursday (2 November 2006) the Australian Stock Exchange (ASX) released draft changes to The ASX Governance Council’s “Principles of Good Governance and Good Practice” for comment.
The requirement for ASX listed companies to disclose the extent of compliance with these new principles is due to go into effect from 1 July 2007. However, companies and other interested parties can comment on the draft until 9 February 2007.
Unfortunately, some of the media articles that have appeared on the proposed changes appear to be either confused or misleading. In addition, some aspects that we at Guerdon Associates think are significant were not picked up by the media at all, or not commented on by the Council.
Companies will be relieved to know that the revised principles reduce some of the executive and director remuneration compliance burdens. But the reduced disclosure on some aspects is offset with additional disclosure requirements on others aspects. And, as the Council has already admitted, there are several question marks remaining for some of the principles. Lastly, the Council has elected to retain detailed guidance and commentary that some may find too prescriptive.
Guerdon Associates has prepared several articles addressing major changes as they impact director and executive remuneration and performance management that we trust will assist in understanding the significant scope of some of these changes.
For related articles in this ASX Governance Council’s principles amendments series, see:
ASX Governance Council Requires Evaluation Of Directors And Senior Executives
ASX Governance Council Removes Remuneration Disclosure Recommendation
ASX Governance Council Recommendation Requires That Many Companies Change Their Remuneration Committee
ASX Governance Council Changes Catch Hedging Of Executive Options
ASX Governance Council Removes Guideline For Disclosure Of Non-Executive Director Retirement Benefits
ASX Council Unsure On Senior Executive Equity Pay
ASX Governance Council And ASX Not Sure Where To Go On Director Equity