Background

The Centre for Corporate Governance is an internationally recognised and inter-disciplinary research centre based at the University of Technology Sydney (UTS). The main focus of the Centre’s researchis international corporate governance. The Centre has formed relationships with other research centres and academic researchers nationally and internationally with linkages in Europe and Asia and a strong research track record in this field of study.

The website of the Centre is https://www.uts.edu.au/staff/thomas.clarke

The Centre can also be followed on its Twitter page http://www.twitter.com/corpgovresearch

Recent Centre Research

Survey of Board Evaluation

The UTS Centre is presently engaged in an international survey of board evaluation commissioned by the Australian Council of Superannuation Investors (ACSI). Board evaluation is becoming universal in large listed corporations in the US, Europe and Australia. However though the processes of board evaluation are becoming more rigorous, the outcomes of board evaluation are not normally disclosed to shareholders. This survey is exploring how the processes of board evaluation may contribute to board performance, and how these outcomes may be reported to investors.

Women on Boards

The UTS Centre on 2/3 March held a colloquium with international researchers from the UK, Norway, United States, New Zealand and Australia examining the progress of the international effort to enhance diversity on boards of directors of listed companies. This was in the context of an Australian government survey on gender in boards of directors that revealed that women were poorly represented on boards, and that the situation was deteriorating rather than getting better. The Australian Securities Exchange (ASX) decided to make it mandatory that all listed companies review and improve the level of diversity existing on their boards. At the colloquium the leading women directors in Australia were interviewed regarding new ways to facilitate the mentoring and development of women directors.

(Photograph of Centre members included in this mailing. From left to right Professor Michael Adams, Professor Thomas Clarke (Director of UTS Centre), Lis Boyce (member of advisory board, partner of DibbsBarker law firm), Alice Klettner, Tim Sheehy (member of advisory board, CEO of Company Secretaries Australia).

Recent Developments in Australian Corporate Governance

GFC

Australia survived the Global Financial Crisis with its banking reputation mostly intact and without having major banking collapses occurring. However, it did not remain unscathed with several corporations in the fringe financial sector going bankrupt as conditions worsened in the debt markets, the largest of which was Babcock and Brown. Nevertheless, Australian banks joined a handful of peers in the OECD countries of Canada, Netherlands and Spain in weathering the GFC. One reason for the strong regulatory framework in Australia, was the reforms implemented by the country’s prudential overseer, the Australian Prudential Regulatory Authority (APRA) after the collapse of Australia’s largest insurer HIH in 2001.

Better conditions in the financial markets in 2010 saw the end of the Federal Government’s wholesale guarantee which underwrote the Australian financial system by providing government funding to banks during the tight credit conditions in 2008-2009. Details of the scheme can be found in the link below:

http://www.guaranteescheme.gov.au/

RBA

The Australian central bank, the Reserve Bank of Australia (RBA), celebrated its 50^thth anniversary symposium with papers from the European Central Bank’s (ECB) Jean-Claude Trichet and Bank for International Settlements’ (BIS) Jaime Caruana. anniversary with other central bank representatives from the G20 and the Asia-Pacific region. There was a general respect for the resilience of the Australian financial and regulatory system during the crisis. Below is the link to the RBA’s 50

http://www.rba.gov.au/publications/confs/2010/index.html

China

Another factor which helped Australia’s position in the last few years is its trade relationship with China. China’s growth has had a major effect for resource-rich countries. Mining has helped steady the country’s growth as mountains of coal and iron ore are mined and shipped from Australia to China.

Dependency on future economic growth of China is not without its pitfalls. The relatively opaque and poor disclosure requirements (compared to Australian corporate governance) by Chinese state-owned enterprises is a matter of concern. Given that most Chinese companies have substantial state ownership and board members are in general Party member officials, recent overtures by these entities towards Australian companies has focused on the potential clash of values and how corporate governance can be practised if an Australian listed company has Chinese government directors. Conflicts may arise on a board where different representatives have varying degrees of stakeholder responsibilities.

The spurning of Chinese company Brightfood by Australian company CSR, over the potential acquisition of the sugar arm of CSR by Brightfood, is one indicator of Chinese outward investment and interest in Australia. For a comparison of company disclosure requirements, below is Bright Food Group’s Management Team webpage which consists of two photos of the Chairman and the CEO with no additional text on their biographies.

http://www.brightfood.com.cn/en/about/team.asp

Whereas below is the screenshot of listed company CSR’s board and management team with biographies as per ASX disclosure requirements:

http://www.csr.com.au/facts/Pages/defaulta599.aspx

Chinese company standards of information disclosure on the competencies of their board, management and relationships are still found to be wanting.

Chinese interest in Australian companies has also underlined how Australia’s Foreign Investment Review Board (FIRB) requires more institutional support to deal with such transactions. Below is the link to the FIRB’s website:

http://www.firb.gov.au/

Lastly, the trial and sentencing of Anglo-Australian mining’s Rio Tinto’s executive Stern Hu and colleagues has shone the spotlight on China’s developing judicial system, issues of corruption and transparency, and the general conduct of business relationships in the country.

 

SPONSORSHIP AGREEMENT

between

ddb Deutsche Digitale Bibliothek GmbH & Co.

Publishers of VIPsight.eu

represented by the Managing Director

party of the first part

and 

nn

Sponsor

party of the second part

 

§1

For purposes of sponsorship, the parties agree the following performance(s) on a reciprocity basis:

The party of the second part shall provide, in connection with the publication of corporate governance material (www.VIPsight.eu), earmarked financial resources to promote the party of the first part. In return, the party of the first part undertakes to place the company name/logo suitably and highly visibly and/or to mention it in an appropriate way (advertising).

The above-mentioned material in VIPsight.eu shall be published by CLUB of FLORENCE (CoF) – Istituto internazionale per una buona CORPORATE GOVERNANCE – International Institute for good CORPORATE GOVERNANCE – Internationales Institut für gute CORPORATE GOVERNANCE, Florence.

 

§ 2

The sponsor undertakes to provide the following annual services to the party of the first part:

material sponsoring to a value of € -. - (in detail #)

and/or

a sponsoring amount of € -. - (in words: #),

On receiving the invoice, and in any event no later than 4 weeks after admission to the public list of sponsors of VIPsight.eu, the sponsor’s performance is due and payable.

 

§ 3

The party of the second part shall provide the party of the first part with the materials (images, logo, text, URL, software, etc.) required for the agreed marketing measures free and on time in accordance with §2; they may not be used other than as authorized and for the stated purpose.

The party of the first part is not responsible for marketing success. Any liability by the party of the first part for loss of or damage of any kind to the materials provided, unless negligently or intentionally caused by employees of the party of the first part, is excluded.

 

§ 4

The advertising materials made available to the party of the first part may be used only for the purpose agreed in this contract. Further or other uses shall require the prior approval of the party of the second part.

There is agreement between the parties that the use of the marketing materials handed over in or on products/property of the party of the first part does not give the party of the second part any rights to the products/property, in particular copyright and/or competition rights.

 

§ 5

To complement and supplement this sponsorship contract, the rules of the sponsorship statute in its currently valid form shall apply, in doubtful cases as in the version of the date of the contract.

 

§ 6

This contract may at any time be cancelled on ordinary notice of six months at the end of a calendar year, or without notice by mutual agreement. A one-year sponsoring amount is due and payable upon signature. The right of extraordinary termination shall remain unaffected.  

§ 7

If any provision of this Agreement be or become invalid, this shall not affect the validity of the others. The parties commit themselves to replacing such invalid provision by one which corresponds to the intended economic purpose. Gaps in the contract shall be dealt with similarly.

No side agreements have been made. Repeal, amendment or supplementation of the contract must be in writing. The jurisdictional venue shall be Cologne.

 

Cologne, January 2014

 

VIPsight.eu Views, Information, Politics regarding Corporate Governance

STATUTE

to regulate agreements between the sponsor (nn) and the sponsorship recipient ddb (Deutsche Digitale Bibliothek GmbH, publisher of the publication VIPsight.eu)

 

§ 1 Definitions

(1) Donations are money, property or other benefits which are granted without the need for any consideration to be agreed or expected other than as mentioned herein. (2) The characteristic of sponsorship benefits is the non-business, altruistic provision of donations in cash or in kind without valuable consideration and not tied primarily to an advertising effect.

For the sponsor, it is important to promote the goal- and project-related work of the sponsorship recipient stipulated in the contract in general and with the aim of obtaining a counter-performance supporting his own marketing objectives in the form of communication (improvement of corporate image, dissemination of the brand, placement of the logo etc.)

 

§ 2 Requirements

Donations to the sponsorship recipient are in principle for non-profit purposes within the meaning of the Tax Code (§ 51ff. AO). In line with the sponsorship recipient’s fundamental principles, they may be sought only under the following conditions:

• Freedom of journalistic work without any other special interests is to be ensured at all times.

• VIPsight’s reputation must be upheld.

• Donations must be independent of sales transactions with the parties and may not be made a prerequisite for transactions with one of the parties.

• Donations must be used for the production of the newsletter VIPsight.eu - direct donations to individuals are not allowed.

• Transparency must be ensured.

 

§ 3 Transparency

Any form of donation must be understandable and recognizable to readers. To this end, the publisher shall inform the editor at least once a year of all donations made and their amount.

 

§ 4 Procedures and written form

(1) The handling of work with sponsors has to be based on objective criteria. Persons approached with offers of donations shall immediately inform the publisher or an agency designated by him.

(2) Before deciding whether a donation will be accepted, it shall be determined whether a a counter-performance is expected by the sponsor. If so, particular attention is to be paid to ensuring that the donation is unobjectionable. A donation must be refused in particular if the donor wants to influence specific issues or content or claim more than abstract visibility for himself.

(3) The projects promoted may not offer improper benefits to the sponsorship recipient or the publisher. Even the appearance of undue advantage should be avoided. Specific payments for an additional and clearly defined task (e.g. project management) remain unaffected. The regulations of Länder-specific tax laws shall apply.

(4) The object and purpose of the donation are to be set out understandably and in written form. Specific tasks and - if a counter-performance within the meaning of §1(2) is expected in return - counter-performances are to be designated precisely.

(5) The conclusion of sponsorship agreements shall be decided by the publisher, in agreement with the editor.

(6) Sponsorship agreements or promises of donations must in principle be in writing. If written form is waived, this is to be put on record, indicating the grounds.

(7) In connection with donations no benefits may be promised or suggested, and no additional agreements may be made that go beyond those specified in writing.

(8) Use of the logo and name “VIPsight.eu” may be made by a sponsor only with the express consent of the sponsorship recipient.

 

§ 5 Entry into force

These guidelines shall enter into force, by decision of the publisher’s board and the editor’s management, with their publication on the VIPsight.eu homepage.

 

Florence, January 2014