ASX on the hunt

The Australian Securities Exchange has fired a warning shot at company boards that fail to comply with governance standards, and may announce fines and enforcement actions.

The threats are mainly aimed at listed companies and trusts that fail to fall into line with the ASX’s corporate reporting standards, and directors who have traded during blackout periods.

The ASX also says half of the S&P/ASX200 companies last year failed to disclose trading in their shares within a week, as dictated by law.

In a statement, head of the ASX Corporate Council Eric Mayne says: “Disclosure is the key. The more transparent listed entities are about their corporate governance practices, the better placed investors will be to make informed investment decisions.”

But the ASX says its principles are working, pointing to a review of its corporate governance standards adopted in 2007, reporting 90.5% of listed companies used its principles, while 94% of the top 500 listed companies had adopted all practices.

The report also says: “There has been a significant increase in reporting against all recommendations by listed trusts. The overall reporting level for listed trusts in 2007 increased by 8% to 93% compared to 85% in 2006.”

The ASX recommends companies adopt the principles and a code of conduct to “guide executives as to the practices necessary to maintain confidence in the company’s integrity, and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices”.

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