ASX Corporate Governance Principles
These principles and recommendations set out recommended corporate governance practices for entities listed on the ASX that, in the ASX Corporate Governance Council’s view, are likely to achieve good governance outcomes and meet the reasonable expectations of most investors in most situations. We were asked by the Committee to address the consistency of our policy with the principles.
The principles are voluntary, with the Council noting it is up to Boards to choose whether an entity adopts particular corporate governance principles, and they seek to apply an “if not, why not” approach, where entities would explain why they have not chosen to adopt a particular principle or recommendation.
Some of the principles and recommendations are specific to protecting the interests of shareholders, while others are more general and could theoretically be adopted by Vision Super in those cases where we are not already following a similar practice.
The ASX Corporate Governance Principles and Recommendations are directed towards listed companies fulfilling their obligations to shareholders. While many of the governance principles can also apply to a profit-to-members superannuation fund, some do not translate.
Some of the recommendations where Vision Super does not comply directly contradict the long-held position of the organisation, for example the recommendation that the majority of Directors should be independent.
The Committee has also considered whether fulfilling disclosure requirements that are imposed on listed companies would add any value for members. For example, disclosures around which Committee members attended which meetings of a committee, or the skills matrix of the Board, in the context of Directors being elected by shareholders may be relevant information but may not add anything of value for a member of a super fund where Directors are nominated by a sponsoring organisation rather than being elected.
Likewise, further public disclosure of internal risk management processes may not be as relevant in the heavily regulated superannuation sector as it is for a listed company that faces many different risks.
SEC Proposed New Proxy Rule Regulations on Proxy Advisors
Vision Super co-signed the PRI's SEC response letter during mid-December 2019 where signatories urged that the SEC preserve the right of shareholers to make thier voices herad and the independence of proxy voting advice.
The US Securities and Exchange Commission voted 3-2 to issue a proposed rule on 5 November with respect to shareholder advisory companies. These rules would require the proxy advisors to give companies two chances to review voting materials before they are sent to shareholders. They will also be required to include a link to any response by the company in their advice.
This will have implications for investors as to the timeliness of when research is made available. It is hard to see how advisors can go through this process with enough time to give out advice before the cut-off times for voting before an AGM. The proposed rule also requires proxy advisors to provide additional disclosures of conflicts of interest, methodology and information sources, and to make the company’s written response to the report available to the proxy advisor’s clients.
ISS has sued the regulator claiming its rights to free speech had been infringed. ISS claimed in its lawsuit, among other things, that the guidance violated government rulemaking procedures by failing to provide any opportunity for public comment. The lawsuit asked for a permanent injunction to invalidate the SEC’s guidance.
Our proxy advisor Glass Lewis is continuing to work through these proposed rulings, and we should soon have a better idea of the potential impact to research timeliness in relation to meetings and vote cut-off dates. At this stage, the ability of proxy advisors like Glass Lewis to provide independent timely research is a big concern if the proposed rules become regulation. It could be the case that the proxy advisor model becomes broken in the US.
The SEC’s proposal was also subject to a 60-day public comment period following its publication in the Federal Register. Following on from the comment period closing, the SEC will have to decide whether it will move to adopt the rules, or some variant of them, and if so, on what timetable. We will most likely have a reasonable transition period if these regulations come into effect. We may need to significantly adapt what we do.
These developments are in stark contrast to the regulations for proxy advisers that the EU adopted in the Shareholder Rights Directive II (SRD II) earlier this year.
In the UK, the Financial Conduct Authority has implemented SRD with respect to proxy advisers, requiring the advisors to have a code of conduct disclosing any conflicts of interest.
The SRD II recommends that there is a code so that people would better understand what proxy advisors are doing and how they do it. In December 2015, the European Securities and Markets Authority (ESMA) concluded there was no need to overhaul the regulations for proxy advisers.
Global Investor Letter to the G7 and G20 Governments on Climate Action in 2019
- Focus to call on global leaders to do the following:
- Continue to support and implement the Paris Agreement
- Drive investment into the low carbon transition
- Implement climate-related financial reporting frameworks
ACSI & RIAA Submissions
As members of ACSI and RIAA, these organisations engage with government, regulators and policy makers to better align comany's with the long-term interests of shareholder investors.
Please refer to the folloinwg links on respective website links for current and previous submissions:
https://acsi.org.au/submissions/ (tax, ASX Listing Rules and Modern Slavery Act)
Vision Super Letter to Federal Australian Politicians on Proactive Transition to a Low Carbon Economy - FY Ending 2017
Main objective here was to call on all sides of politics to develop a bipartisan public policy consistent with the science that will limit the devastation of climate change, facilitate the orderly transition to a low-carbon economy, and take responsibility on a federal level for action which cannot be achieved by individual Australian citizens and organisations alone. We attached this elsewhere in the document.