The proposals outlined this morning by the Australian Council of Superannuation Investors (ACSI) represent common sense reforms which will ensure that shareholder rights are strengthened and that corporate governance standards in Australia move forward.
The ACSI's Towards Better Corporate Accountability paper proposes:
- Annual director elections that would bring Australian board practices in line with the US and UK
- Non-binding shareholder resolutions to provide advice, guidance and feedback as part of open communication channels between investors and executives
- Democratisation of remuneration policies to help align executives' interests with long-term outcomes
- CEO pay ratio disclosure
Institutional investors have a considerable role to play in ensuring that companies demonstrate the accountability and transparency which the community expects of corporate actors.
These proposals will help to ensure that all companies are held accountable by their shareholders, and that executive and CEO pay structures are transparent and in keeping with community expectations.
As noted by ACTU Assistant Secretary Scott Connolly:
"These proposals will ensure that best practices from around the world are embedded in Australia corporate governance, and will incentivise companies to act in accordance with community expectations.
"Institutional investors are ideally placed to improve overall accountability and transparency for shareholders."
