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Significant improvement in Corporate Governance Disclosures
Overall reporting levels – the aggregate of adoption of recommended practices and of ‘if not, why not’ exception reporting – were higher in 2005 than in the previous year.
Key improvements in corporate governance reporting in 2005 were as follows:
Overall reporting levels
- The overall reporting level for all Recommendations (being the aggregate of actual adoption of the Recommendations and the ‘if not, why not’ exception reporting) increased to 88% from 84% in 2004.
- 14 out of 28 Recommendations had reporting levels over 90%
- An additional 9 out of 28 Recommendations had reporting levels over 80%
- This compares with the 2004 review where 8 out of 28 Recommendations had reporting levels over 90% and an additional 9 out of 28
- Recommendations had reporting levels over 80%
- The overall reporting level increased at a faster rate among companies outside the Top 500
Adoption reporting levels
- The adoption reporting level for all Recommendations increased to 74% from 68% in 2004.
‘If not, why not’ exception reporting levels
There were continued high levels of ‘if not, why not’ exception reporting in relation to:
- Recommendation 2.1 (A majority of the board should be independent directors) - 47% ‘if not, why not’ exception reporting
- Recommendation 2.4 (The board should establish a nomination committee) - 57% ‘if not, why not’ exception reporting
- Recommendation 9.2 (The board should establish a remuneration committee) - 38% ‘if not, why not’ exception reporting.
The findings emerged from ASX’s review of annual reports of 1162 companies that reported with a 30 June 2005 balance date. Listed trusts, not included in this review, will be the subject of a separate review which will also include stapled entities and listed managed investment schemes.
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