Business Reporting Leaders Forum At KPMG Sydney on 1 December 2014 and KPMG Melbourne 4 December 2014
Attendees – a broad cross-section of the reporting supply chain in Australia Chief Financial Officers/ Directors / Chief Executive Investor Relations Officers Accounting / Legal Firms Investors & Analysts Other Stakeholders Finance Officers & Sustainability Officers Paul Davies John Stanhope Diana D’Ambra Andrew Coles Michael Bray Michael Long Aus. Post, AGL Oz Minerals Kylie Dumble Lend Lease Australian Shareholders Banarra Tony Coleman Association Jenny Merkley Alan Dayeh Lonergan Edwards Simone Schlitter Diana McEwan Netbalance Peter Colley Rachel Scully Stockland Alison George (M) CFMEU Regnan KPMG Fisher Gethin Amanda Wilson Timothy Nelson Derryn Heilbuth Regnan Paul Murphy Matthew Bell AGL BWD Creative Peter Wilson ACSI Helen Adair AHRI Simon Longstaff Meg Fricke Lauren Owens Peter Matthey Pablo Berrutti Ernst & Young National Australia Bank St James Ethics Centre Cabrini Health Australia Colonial First State Joycelyn Morton Ken Morrison Brad Pollock Jason Robertson PCA IFAC Board Kerry Lee Deloitte David Jones Leah Watterson/ Nicola Business Council of Pamela Stark Steele Australia Regina Fikkers Jo Cain The Middleway Pty Ltd Aust Instit of Company PwC BECA/ AuASB Directors Ian Matheson James Rohan, Australian Investor Africa Zanella, Relations Association Michael Rich Regulators / Exchanges / Standard Setters/ Academia SKE/ IIRC Accounting Bodies Government Liz Prescott Nicholas Diss Julie Hill James Guthrie IIRC Nonna Martinov-Bennie CPA Australia Safe Work Australia Keith Reilly Macquarie University Nick Ridehalgh Doug Niven Marina Michaelides ASIC KPMG AASB Roger Simnett Trish Strong University of NSW Steve Vamos SKE Rosemary Sainty University of Technology, Sydney
Agenda Time Time Subject Presenter Syd Melb 3.30 7.30 Welcome Steve Vamos (S)/ John Stanhope (M) 3.40 7.40 Update on directors liability Leah Watterson, Nicci Steele (AICD)/ Michael Bray 3.55 7.55 Update on global <IR> developments Liz Prescott (IIRC) 4.10 8.10 Update on BRLF activities Michael Bray/ John Stanhope • Federal Government • Director Liability • ‘Red tape’ review • Accountants Report to G20 • B20/ G20 4.40 8.40 Assurance Nick Ridehalgh/ Marina Michaelides (AuASB) 4.50 8.50 BRLF plan for 2015 Nick Ridehalgh/ Michael Bray 5.00 9.00 Close Steve Vamos/ John Stanhope Slide 3
Directors Liability Leah Watterson, Nicci Steele (AICD)/ Michael Bray Slide 4
Directors Liability Honest & Reasonable Director Defence released in August 2014 by AICD - Developed through the AICD Law, Reporting and Corporate Governance Committees. - The defence impacts all directors – it is not just focused on listed company directors. - Corporate reporting is only one component. The defence seeks to enhance corporate and director performance – it ‘lets directors be directors’ by allowing them to focus on governance, oversight, harnessing new opportunities and strategic performance. - Defence aims to support directors who act honestly and reasonably in carrying out their duties. It does not alter their primary duty of care; just provides an additional defence. - Paper identifies that the business judgment rule only applies to the duty of care and diligence. It does not apply to financial reporting, continuous disclosure, insolvent trading, misleading or deceptive conduct provisions or any other provision in the Corporations Act. - The paper also sets out stepping stone cases where director duties under s180 (1) are alleged to have been contravened from a corporate obligation, and the BJR is not available. - The defence should remove constraints on good directors and make them more effective, as it will change the board mindset viz personal risk. - AICD are aware of calls by some to extend the BJR rather than legislating a broad-based director defence Slide 5
Global developments in <IR> Liz Prescott (IIRC) Slide 6
IIRC Strategy Delivery Overview
Finalisation of Pilot Programme
Benefits of <IR> - Pilot feedback PAUL DRUCKMAN, CEO, IIRC
Global <IR> Momentum EU - Directive on disclosure of non- JAPAN - <IR> a financial and diversity information by crucial part of UK – FRC’s Strategic certain large companies and groups “Revitalisation Review Strategy” European Commission hails <IR> as “step ahead” SINGAPORE – Harvard Business market-led network School study hails established. <IR> as enabler of Director support for financial stability SEBI -: not ‘if’ <IR> but ‘when’ for <IR> Brazil – BOVESPA Comply or Explain Malaysian Prime Requirement, growth Minister of local network Sth Africa – IRC endorsement of declares business take <IR> promoted by Framework up of <IR> B100 and major JSE <IR> comply or explain Superannuation Funds
Global < I R> Mom entum ICGN – 4 th edition of the Principles World Bank implements <IR> recommends Boards provide an integrated report UNCTAD 2014 World Investment Report recognises “<IR> at the heart of Sustainable Stock Exchanges” Recommendation to G20 on <IR>
Corporate Reporting Dialogue CDP CDSB • Deliverables underway FASB IASB • Landscape and stakeholder mappings GRI IIRC IPSASB SASB International Org. • Possible focus areas for 2015+ include; for Standardization • Materiality • CRD-convened dialogue with regulators (conference(s)) (National and/or regional) • CRD-convened dialogue on corporate reporting and technology • CRD-convened dialogue on assurance and reliability of information
Industry Networks • Public Sector Pioneer Network • IR Banking Network • IR Insurance Network • IR Pension Fund Network • <IR> Technology Initiative • Other priority sectors Healthcare (Pharma) Energy
Update on BRLF Activities John Stanhope, Michael Bray Slide 14
Update on BRLF Activities Federal Government Assisting in bringing directors and investors together on director liability and ‘safe harbour’ for companies Form an independent task force reporting to government on dismantling volume, complexity and red tape around specific aspects of disclosure to complement other aspects of corporate reporting reform (e.g. integrated reporting) Endorse and adopt the recommendations of the ‘Big 6’ accounting firms regarding making corporate reporting more conducive to infrastructure and other long term investment, including finding the right implementation pathway for Australia (e.g. ‘if not, why not?’ ASX Corporate Governance Principle) Slide 15
Update on BRLF Activities Big 6 Accounting Firms – 2013 G20 Our recommendations Longer-term focus The Panel recommends that the 2014 B20 make the following actionable recommendations to the G20. Encourage corporate reporting innovations and initiatives that provide investors with a longer-term and broader perspective on shareholder Encouraging infrastructure value creation to complement the historical financial performance and investment poses many challenges current financial position perspective provided by financial statements. for governments and developers – The B20 notes the particular relevance of integrated reporting as an Over the next 15 years, the gap example in this respect. between available funds and Each G20 Finance Minister should assess and address any practical, legal demand for infrastructure or statutory barriers to improved corporate reporting and work towards development around the world could removing such barriers in order to make corporate reporting more be as much as $500 billion annually 1 conducive to infrastructure and other long-term investment. 1. Estimate by McKinsey and Standard & Poor's Slide 16
Update on BRLF Activities 2014 B20/ G20 - Australia In June, the B20’s Infrastructure and Investment working group • report made a number of recommendations for the G20 leaders to consider which will make a substantial contribution to increased employment and inclusive, sustainable growth, but notes that closing the infrastructure gap requires continued action on many fronts. • The B20 references its support for certain initiatives that are already underway (to assist in closing the infrastructure gap) including: • A review by the (International) Integrated Reporting Council and International Accounting Standards Board in relation to making corporate reporting more conducive to infrastructure and other long-term investment, and eliminating or addressing current barriers. Slide 17
Update on BRLF Activities AuASB/ IIRC Assurance Workshops Nick Ridehalgh/ Marina Michaelides (AuASB) Slide 18
Update on BRLF Activities AuASB/ IIRC Assurance Workshops • 3 Australian co-hosted Assurance on <IR> roundtables held in October 2014 – BRLF (M), CPA Australia (M), CAANZ (S) • Other IIRC roundtables in Belgium, Malaysia, Singapore, South Africa, Spain, UK and US • Chairman of the AUASB also attended New York roundtable and the IIRC Annual Pilot Programme conference in September 2014 where multiple assurance panel discussions were held • Feedback from the assurance roundtables have been used as the basis for AUASB response to IIRC on Assurance on <IR> An Introduction to the Discussion due on 1 December 2014 Slide 19
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