Abstract
This paper investigates the changing duties and responsibilities of boards and directors of Australian public companies. The corporate governance environment in Australia is currently going through a period of significant transformation raising the question of whether in this fluid and shifting environment company and board performance can still be assessed largely on the basis of profit, share price and dividends generated over the short term. These almost certainly will continue for some time to be the key metrics of company and board performance and it is hard to see how it could be otherwise. Nevertheless, a growing chorus of influential stakeholders is calling for the introduction of a more balanced and comprehensive suite of performance indicators that better reflect the realities of corporate governance early in the Twenty-first Century. The paper examines how these stakeholders are reshaping corporate governance in Australia and also calling for a reconsideration of the way in which performance is assessed.
Highlights
This paper considers the extent to which an Australian publicly-listed company’s performance can be attributed to the governance performance of its board
This paper investigates the changing duties and responsibilities of boards and directors of Australian public companies
The corporate governance environment in Australia is currently going through a period of significant transformation raising the question of whether in this fluid and shifting environment company and board performance can still be assessed largely on the basis of profit, share price and dividends generated over the short term
Summary
This paper considers the extent to which an Australian publicly-listed (public) company’s performance can be attributed to the governance performance of its board. Having reviewed the Consultation Draft and final version of the new edition of Principles and Recommendations, the chapter goes on to consider some of the more interesting and provocative responses to the governance implications of both versions of the document It considers, in particular, the reaction to the two versions of the AICD, Australia’s pre-eminent organisation representing company directors, the views of ASIC1, Australia’s chief corporate regulator (introduced ), and the evaluations of ACSI, a large and influential organisation representing and advocating for Australian institutional investors and asset owners[2]. There can be little doubt that corporate governance, both as a field of practice and an academic discipline, is undergoing significant change This change is in response to a number of external environmental, political and social challenges that are forcing company boards and executive managers to rethink corporate strategies, objectives, ways of doing business and methods of engaging with the shareholders and other stakeholders of the companies they oversee. The view adopted here is that only once these important matters have been settled can a meaningful debate begin about board governance and company performance and how governance and performance should be assessed
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