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Corporate governance in the Asia-Pacific (Australia) (Key characteristics…
Corporate governance in
the Asia-Pacific (Australia)
Key characteristics influencing
Australian corporate governance
Legal system - Common law
Board structure - Unitary
Predominant ownership structure - Institutional investors, non-institutional shareholders (corporate or family)
Important aspect - More emphasis on shareholder rights in recent years, also board diversity
Main business form - Public corporations
Lay solid foundations for management & oversight
Recognize & publish the respective roles & responsibilities of board & management
A framework to enable the board to provide strategic guidance & effective oversight
Structure the board to add value
Have a board of an effective composition, size & commitment to discharge adequately its responsibilities & duties
Recommendations supporting the principle
majority of board should be independent directors
chairperson should be an independent director
roles of chairperson & CEO should not be exercised by the same individual
board should establish a nomination committee
information relating to directors should be included in corporate governance section of annual report
Safeguard integrity in financial report
Have a structure to independently verify & safeguard the integrity of the company's financial reporting
Recommendations
CEO & CFO should be required to state in writing to the board of company's financial reports
Establish an audit committee
Chaired by an independent chairperson who is not chairperson of the board
Promote ethical & responsible decision-making
Actively promote ethical & responsible decision-making
Make timely & balanced disclosure
Promote timely & balanced disclosure of all material matters concerning the company
Certain information should be disclosed, including explanation from any departures
Remunerate fairly & responsibly
Ensure that the level & composition of remuneration is sufficient & reasonable & that its relationship to corporate & individual performance is defined
Recognize & manage risk
Establish a sound system of risk oversight & management & internal control
Respect the right of shareholders
Respect the right of shareholders & facilitate the effective exercise of those rights
Recognize the legitimate interests of stakeholders
Recognize legal & other obligations to all legitimate stakeholders
Encourage enhanced performance
Fairly review & actively encourage enhanced board & management effectiveness