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Corporate Governance Principles

Companies Update
12 February 2004
Update no 03/04

Important information for ASX Listed Entities

Corporate Governance when do companies need to start reporting?
Listing rule 4.10.3, which was amended on 1 January 2003, requires companies to provide a statement in their annual reports that discloses the extent to which they have followed the ASX Corporate Governance Council Principles and Best Practice Recommendations (the 'Recommendations'). As the rule says, companies need to:
  • identify any Recommendations that have not been followed;
  • give reasons for not following those Recommendations; and
  • if the Recommendation was followed for only part of the reporting period, to state clearly the period during which it has been followed.

ASX has received a few requests seeking clarification about when companies need to start providing this information. 

Companies must comply with listing rule 4.10.3 for their first full year that begins AFTER 1 January 2003. For example, a company with a year end of 31 January will need to provide its first disclosure under the rule for the year commencing 1 February 2003 and ending 31 January 2004. The information should be provided in the company's 2004 annual report (released in mid 2004). Companies with a year end of 31 December will need to provide their first disclosure under the rule in their 2004 annual report (released early 2005). Companies with a 30 June year end will need to provide their first disclosure in their 2004 annual reports, released in later 2004.

Help with providing effective corporate governance disclosure
The 'exception reporting' requirement of listing rule 4.10.3 recognises the diversity of ASX listed companies and that many will, for a number of reasons including size and structure, not elect to follow all of the Recommendations. ASX's rules are disclosure oriented and accordingly our focus will be on the disclosure by listed companies of the reasons why particular Recommendations were not followed. 

Suggestions and examples aimed at assisting companies to make more effective corporate governance disclosure will be contained in upcoming editions of Companies Updates. 

Exemplary Reporting 
Last year, the ASX Corporate Governance Council invited companies to 'road test' their procedures ahead of the mandatory period. This was willingly taken up by most of the larger companies listed on ASX, and while all such efforts were admirable, several have been recognised as particularly worthy of commendation. 

ASX congratulates the following companies:

  • Westpac Banking Corporation for outstanding effort in corporate governance reporting against the Principles.
  • BHP Billiton for the way in which it has dealt with reporting in a multi-listed environment and reporting of remuneration information.
  • Bluescope Steel Limited for its environmental reporting.
  • CSL Limited for its reporting of continuous disclosure practice.
  • Leighton Holdings Limited for its 'if not, why not' reporting  and reporting against corporate values.
  • Telecom Corporation of New Zealand Limited for its reporting on director independence.

ASX is confident that our companies will continue to provide similarly considered, thoughtful and responsible responses in their obligations to shareholders in 2004. 

For further information please contact your Companies Adviser. 

To help keep our Listed Entities informed of information and events ASX will be sending emails to the Company Secretary's Office from time to time. You are receiving this email because you have been identified as a key contact within the Company Secretary's Office at your organisation. If you would like to update your email address please do so via the Directors/Senior Management page on ASX Online for Companies. Feel free to forward this email to any relevant parties within your organisation.