Policy

Principles of Good Corporate Governance and Best Practice Recommendations

Background

The Group of 100 (G100) is a member of the ASX Corporate Governance Council and participated in the development of "Principles of Good Corporate Governance and Best Practice Recommendations" issued in March 2003 (www.asx.com.au/corporategovernance).

G100 Views

The G100 strongly supports:

the 'if not, why not' approach to applying and complying with the principles and recommendations. The G100 believes that this approach must be supported by appropriate monitoring and review mechanisms to ensure their continuing relevance as the environment and expectations change; and
the principles of good corporate governance and best practice recommendations as a package. The G100 "Code of Conduct for Chief Financial Officers" is referred to as a source of guidance in relation to promoting ethical and responsible decision-making (Principle 3). The G100 "Guide to Review of Operations and Financial Condition" is referred to as guidance on making timely and balanced disclosure (Principle 5).

While supporting the principles and recommendations as a package the G100 is concerned about the following:

the developing diversity of requirements relating to disclosure of director and executive remuneration and contracts in the Corporations Law, Accounting Standards and Listing Rules. In respect of disclosure of the contracts with key executives the G100 believes that the basis of disclosure, including continuous disclosure obligations, should be on a 'no surprises' basis with significant details being disclosed in the annual report. The overall basis of the approach should be that the nature and frequency of the disclosure is a matter of judgement to ensure the absence of unanticipated surprises to the market;
the status of CFOs. The G100 believes that, if not a member of the board of directors, the CFO should attend board meetings subject to appropriate carve-outs in respect of issues relating to personnel and compensation. The need for this practice is supported by the role of the CFO in the corporate governance processes of the company.

May 2003

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