Skip to content

Acting for You, May 2022

By Catherine Maxwell FGIA FCG General Manager, Policy & Advocacy, Governance Institute of Australia

New climate guide

We launched a new Guide for boards and management on the path to net zero on 20 April 2022. The guide is based on the findings from a specially convened working group of members of our Policy Committees as well as a review of a range of expert guidance. Prepared with the assistance of Finity Consulting, it is designed to assist members in all organisations — large and small and across sectors — to answer the question what should my organisation do about climate change? It responds to recent climate policy developments as well as the significant shifts in expectations on organisations to act on the issue, including disclosure of climate risk. An update of our 2020 report Climate change risk disclosure, the guide is intended to provide practical actionable guidance on what organisations should do to answer this question. Each organisation’s challenges and solutions will depend on its resources, sector, and maturity, and there are case studies to illustrate specific circumstances. The key steps to net zero are:

  • Governance: Orchestrating the climate change conversation. How do you embed climate into the core of an organisation?
  • Strategy: Planning for net zero. How do you deal with the challenges related to transitioning to net zero?
  • Expectations: Managing legal and stakeholder expectations. How do you manage expectations on climate disclosure and action amongst evolving legal expectations?
  • Reporting: Selecting a framework. How do you select a reporting framework which addresses stakeholder needs?

ASA Consultation on Voting and Engagement Guidelines (Guidelines)

ASA recently sought feedback on the Guidelines it uses to guide its monitoring of ASX 200 companies. In our submission we referred to the centrality of the ‘if not, why not’ model under the Corporate Governance Principles and Recommendations which enables companies to adopt practices which are appropriate for their individual circumstances, provided they explain how their practices meet the spirit and intention of the relevant recommendation. We noted this flexibility is helpful particularly for smaller listed entities, including those in the ASX 200, which may adopt alternative practices for legitimate reasons. Given the preponderance of governance guidelines issued by multiple parties, including the Guidelines, this ability to explain alternative practices is important. We observed that it is critical to approach the governance practices of listed entities and any assessment of differing entities’ approaches thoughtfully with proper consideration of their individual circumstances. While shareholders have every right to challenge explanations if they are unconvincing, they should not be evaluated in a mechanistic way. We also commented on aspects of the Guidelines in relation to governance and transparency, executive remuneration and capital management. We referred to ASA’s expressions of concern in public submissions and other commentary about virtual AGMs and its indication it intends to oppose resolutions to amend company constitutions to allow virtual AGMs. We noted that our members have consistently expressed the view that companies should have the flexibility to hold meetings in the way best suited to their unique circumstances.

Issuer services new pricing

Many members have reported over the years that ASX’s current Issuer services fees’ statements are confusing and almost impossible to interrogate. They therefore welcome ASX’s move to streamline and simplify its fee schedule in line with proposals set out in a recent Discussion Paper (Discussion Paper). In our submission we noted that the proposed changes do not impact other fees listed companies currently pay to ASX such as listing fees (initial and ongoing) or holding adjustments which can be substantial and must be paid to maintain an ASX listing or to carry out a transaction. We observed that for listed entities which have modelled the impact of the new Issuer Services fees and are facing substantial increases the proposed new fee structure is an additional impost on the costs of maintaining an ASX listing.

In our submission we also:

  • Noted that the new pricing structure appears to have a disproportionate impact on listed entities with large numbers of HINS who report their calculations indicate they will be paying significantly more than currently. On behalf of members, we asked for more information about the additional value or services listed entities with a large number of HINS will receive for the significant increase in fees as well as more information about the various elements which are included in the new subscription fee.
  • Commented that the Paper referred to the availability of discounts for ‘low velocity’ users. For some members who have modelled the impact of the discount on their fees the availability of the discount will have a significant impact. We questioned why there is such an impact on the fees due to a change in one input which listed entities have no ability to control.
  • Noted that it was unclear whether the electronic calculator used for estimating the new fees included hard copy CHESS statements. ASX announced the introduction of electronic statements in December 2021 but take up to date has been low. Until take up improves listed companies will continue to pay for statements, although at a lower cost in the future based on the new pricing structure. We asked for more information about if and when the savings relating to the phase out of paper-based CHESS statements are likely to be realised.

We will continue to keep members updated on this issue.

Director ID: Latest program milestone

From 5 April 2022, newly appointed first-time directors must apply for their director ID before appointment. Directors who are unable to obtain a director ID in time can apply for an extension. Previously, first-time directors appointed after 1 November 2021 had 28 days to apply.

The updated timeline is the next stage of implementation of the director ID by the Australian Business Registry Services (ABRS), in an effort to combat fraudulent identities, unlawful activity, and to provide more transparency for stakeholders and shareholders.

Applying for a director ID is free and provides directors with a unique 15-digit number that is theirs for life, regardless of the organisation they belong to. Directors must apply for the number themselves as their identity will need to be verified. The fastest way will be online through the MyGovID app, however, alternative methods through phone or paper applications are also available to cater to those with accessibility issues. Once received, directors must advise the company record-holder of their director ID. The ATO offers a comprehensive overview, including a step-by-step tutorial of how to set up a director ID.

The next program deadline will be 30 November 2022 for any current directors appointed on or before 31 October 2021 to apply for a director ID.

We will continue to keep members updated on this issue.


ASA consultation on voting and engagement guidelines — 31/03/2022

Issuer services: New pricing —14/04/202)


Media releases

Time for action on the path to net zero: Climate change roadmap launched for boards and management — 20/04/2022

Australia’s autonomous sanctions: What Russian sanctions mean for you

Next article