Policy

Consultation on new and revised FSC Standards: Superannuation Governance and Proxy Voting

On 27 August 2012, the FSC commenced a two month consultation on the new and revised Standards. 

Superannuation Governance
 
On 6 March 2012, the FSC announced a new policy entitled “Superannuation Corporate Governance Policy”. Throughout the past 6 months, the FSC has developed a new “Superannuation Governance” draft Standard to give effect to the policy. Click here to read the draft Standard.
 
There are five key requirements of the new draft Standard which will apply to FSC members with a public offer or extended public offer RSE licence:
 
•       Majority of independent directors;
•       Independent chair;
•       Prohibition on multiple, competing directorships;
•       Disclosure of an environmental and social governance risk management policy, and
•       Proxy voting record disclosure.
 
The requirement to disclose remuneration proposed by the FSC in March has been superseded by the proposed Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012.
 
The details of each of the first four requirements are contained in the draft “Superannuation Governance Policy”. The fifth element is a new proxy voting requirement which is an existing FSC Standard of which we have substantially revised and expanded coverage. 
 
The requirement to disclose remuneration proposed by the FSC in March has been superseded by the proposed Superannuation Legislation Amendment (Further MySuper and Transparency Measures) Bill 2012. 
 
Proxy voting
 
The existing Standard 13 (proxy voting) will be expanded in coverage and will include all managed investment schemes and superannuation funds (as per the 6 March 2012 announcement) and will also contain enhanced reporting requirements for operators. Click here to read the draft Standard.
 
The key proposed change to the standard is a transition away from aggregated to company level reporting of proxy voting records. The revisions will require voting disclosure on a company by company basis on each resolution voted Australian listed companies - such as remuneration reports and director elections. The current Standard 13 requires only an aggregate report.
 
Process
  1. Stakeholders have two months to review and provide feedback on the Standards. Please provide written submissions via email by 22 October 2012 to standards@fsc.org.au;
  2. After this time refinements based on member and external consultation may be required; and
  3. Final Standards will be issued in December 2012 with commencement from 1 July 2013.
The FSC welcomes comments on all elements of the new and revised Standards – this is intended to be an open consultation where all implementation issues will be carefully considered in order to minimise impact on FSC members.
 
Please contact Andrew Bragg, Senior Policy Manager on 02 9299 3022 or abragg@fsc.org.au if you have any questions about either Standard.
 

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