Australian corporate governance more effective: report
Australia’s shareholder, principles-based approach to corporate governance appears to be generating better outcomes than in other countries such as the United States, according to the latest AMP Capital Investors bi-annual corporate governance report.
The report, details of which were released today, revealed that the major issues confronting corporate governance systems are the effectiveness of boards, remuneration structures and the trustworthiness of financial statements.
Commenting on the report findings, AMP Capital Investors director, sustainable funds, Michael Anderson said that while investors globally believed that effective boards were a key to a company’s long-term success, concern had been expressed about US practices that give shareholders limited power regarding the appointment and removal of directors.
“Australia, on the other hand, has a system which allows shareholders to have a much greater say as the owners of the business,” he said.
“The Australian governance systems seem to demonstrate much more constructive and beneficial communication practices between board and shareholders as evident in recent remuneration reports,” Anderson said.
The report revealed in 2006, AMP Capital voted on 2,068 resolutions at 413 company meetings, with the majority of resolutions not supported by AMP Capital relating to executive incentive plans and remuneration reports.
AUTHOR
Mike Taylor
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