Accountability

You’d have to be nuts to behave like this!

With conflicts of interest and directors’ duties perennial topics in the world of governance, we thought we might have a bit of enlightening fun this week with a little story riddled with conflicts of interest. Your challenge is to identify the breaches of duty by this collection of ‘mixed nuts’, count them up and let us know how many you found. We’ll throw all correct responses in a hat, draw and announce the winner, present a prize and share the breaches in a subsequent blog.

Bob Jones, the local zone elected director of Bingledale Co-op, wore a worried expression as he entered the co-op’s hardware store in Palmville. The co-op had been formed over 50 years ago by a group of visionary peanut growers and had since swallowed up a number of smaller co-ops in the state. Bob, who had represented his zone for over 10 years, was a well-known figure in Palmville. Continue reading

Engaging with stakeholders, engagingly

It seems almost bizarre to suggest that effective engagement with stakeholders is a key element of best practice governance but recent disclosures to emerge from the Royal Commission into banking and the draft fourth edition of the ASX’s governance principles are a reminder that, well, sometimes we need reminding…

The Royal Commission is a stark reminder of the importance of the appropriate balance between the rights of the shareholders and other stakeholders in the company such as customers.

The ASX’s draft fourth edition, including mooted changes to Principle 3 which will require a board to consider the culture of the organisation and its social impact, reinforces this notion. As soon as the board is expected to assume responsibility for culture and social impact, it must critically examine its major stakeholders and develop an appropriate mechanism to engage with these groups in order to develop a trusted relationship, to the point where, if member of the public asked individuals within a stakeholder group what they thought of company X, they’d say “really good”. Continue reading

Let’s have a little introspection in governance reporting

Here’s a novel thought…

Wouldn’t it be a breath of fresh air if, when attending to the regulatory requirement of reporting on governance, boards of listed companies reported on their governance performance to the external market.

Forgive me if I have missed something but in all my years in this profession, my take is that there has been very little – if any – reporting on the actual governance of the board itself. Rather, what we tend to get is listed companies adhering to ASX requirements and carrying a corporate governance statement either within the annual report or making reference to it in the report. Continue reading

What don’t people get about conflict of interest?

Conflict of interest is a pretty straightforward and clearly understood concept, right?

We look at any number of definitions of the term and they all have the central tenet of incompatibility.

Some tell us it’s “a situation that has the potential to undermine the impartiality of a person because of the possibility of a clash between the person’s self-interest and professional interest or public interest”.

Others talk of “a situation in which a person is in a position to derive personal benefit from actions or decisions made in their official capacity”.

So what is it that people don’t get about conflict of interest? Continue reading

Adding a touch of spice to annual reports

You may recall that a good few blogs back, we touched on the great work a UK-based organisation, Eden Project, has done in consistently producing stimulating, refreshing and inviting annual reports.

And with annual report preparation season in Australia less than six months away it’s timely for listed companies, government organisations and not-for-profits to turn their thoughts to the 2016/17 annual report. So I thought I’d stress there are annual reports – and then there are annual reports!

Sadly most tend to follow a rather bland model that does little more than tick all the statutory compliance boxes.
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Hanging ten on the technology wave of communication

Bob Dylan famously sang – some would argue barked – about ‘the times they are a’ changing’ and that’s pretty much the anthem boards need to adopt when it comes to communicating with their shareholders.

Quite simply, the traditional way is no longer the way.  It’s not cutting the mustard, the technology has moved ahead and research trends tell us all we need to know about the appeal of the time-honoured Annual General Meeting (AGM).

So why do we find most boards still holding the traditional annual gig for shareholders in a traditional way?
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Banish annual report boredom and blandness to the bin!

It’s that time of year again, when annual reports are busily being compiled and prepared for a raft of listed and other entities.

Some do it well but most, while ticking all the statutory requirement boxes, tend to churn out rather bland documents – and in the process, they’re missing a trick.

Annual reports don’t have to be as dull as dishwater…they can be lively documents that, while covering off on all the fundamentals, also tell the corporate story in interesting and engaging ways.
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