Assistant Treasurer Arthur Sinodinos has announced that the Australian Securities and Investments Commission (ASIC) will convene a roundtable forum to explore how to more effectively implement the nation’s existing corporate governance framework.
The announcement comes off the back of continued coverage and press surrounding corporate governance issues facing high-profile public interest company David Jones. Other regulatory bodies have also been working towards strengthening adherence and enforcement of corporate governance principles, with the Australian Securities Exchange (ASX) recently commencing the consultation process to revamp its Corporate Governance Principles and Recommendations (see our recent article on that topic here).
Announced on February 18, the round table will include representatives from corporate Australia, with the Australian Shareholders’ Association, Australasian Investor Relation Association, Stockbrokers Association of Australia, ASX, Australian Institute of Company Directors and the Governance Institute of Australia already agreeing to participate. Issues which have already been flagged to discuss include:
- current market practice for director share trading and related aspects of market integrity; and
- ASIC findings regarding the handling of confidential information by listed companies.
ASIC’s announcement seems timely as high profile retailer David Jones once again has been in the press in relation to its corporate governance practices. David Jones chairman Peter Mason and non-executive directors, Steve Vamos and Leigh Clapham were accused of participating in insider trading in the second half of 2013. Mr. Vamos and Mr. Clapham purchased 32,500 shares in the company the day after it had received a proposal from Myer of a potential merger of the two retail heavyweights. Mr. Mason approved the share trades, claiming they were not influenced by market sensitive information as it was highly unlikely the merger proposal would go ahead. In February this year, both the non-executive directors (NED) as well as the Chairman voluntarily agreed to step down despite ASIC concluding there was not enough evidence for prosecution. David Jones has not begun the process of finding replacements for the Chairman and the NEDs.
ASIC has indicated that both NEDs were cleared of any wrongdoing on account of there being insufficient admissible evidence to sustain a conviction.
The roundtable is scheduled for 14 March 2014 with ASIC to report to the Assistant Treasurer by the end of April 2014.