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Australian Corporate Governance Wrap July 2010

facebook Twitter LinkedIn RSS In this blog we cover: “Idiocracy” – Governance Starts at the Top “Come on” The “Alannah Hill Discrimination and Harassment Award” Fair Work Continues to Confuse Is ASIC up to Taking on More Responsibility? “Idiocracy” – Governance Starts at the Top For those that haven’t seen the 2006 comedy “Idiocracy” it’s all about advertising, commercialism, and cultural anti-intellectualism running rampant causing the world to degenerate into a uniformly stupid human society devoid of individual responsibility or consequences. Consider these Google facts: Since the ALP was elected three years ago about 6000 or so boatpeople have attempted to seek asylum in Australia with between 85 and 90 per cent of them ultimately being found to be genuine refugees  So the pollies are worrying about roughly 200-300 illegal immigrants a year. Last year 200,000 Australians sought the assistance of specialist homeless support services and a staggering 79,000 of them were children 200-300 illegal immigrants are an election issue and 79,000 homeless Australian children aren’t.  Go figure!  Is idiocracy becoming a reality? “Come on” Forget homeless Australian children. Why aren’t the pollies debating the issue of Lleyton Hewitt losing in his attempt to control the trademark “come on” This is nothing short of outrageous and sure to swing a few votes in the marginals if enough advertising money is pumped into having the average...

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CompliSpace Blog iPhone WebApp

facebook Twitter LinkedIn RSS CompliSpace has released a free WebApp for iPhone, iPad and iPod touch devices, allowing you easy access to the CompliSpace blog whilst you are on the go! Simply use the built in Safari browser to navigate to the WebApp address and click the ‘Add Bookmark’ button indicated by a ‘+’ icon. The following illustrations will guide you through each step....

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Australian Corporate Governance Wrap June 2010

facebook Twitter LinkedIn RSS In this blog we cover: Big business tax, small business tax – Pick the difference Aussie Banks Please  – “You don’t live in our world” The price of lunch – $3.09 million apparently ASX Speak – Does anyone know what this means? ASIC Spin – Integrity of capital markets Sonray – When a stockbroker is not a stockbroker Other governance stuff that happened in June 2010 Big business tax, small business tax – Pick the difference There were two significant taxation events that played out in June 2010. Event No.1 – The mining tax back flip and a new PM for Australia.  This probably doesn’t need too much more commentary. Event No.2 – The Australian Taxation Office (ATO) released a ruling on taxing small business trusts which has potentially devastating results in the SME sector.  Restructuring costs alone are estimated to run into the hundreds of millions of dollars Throw a tax at the mining industry and you lose a PM. Throw a tax at the SME sector and it barely rates a mention in the mainstream press.   The Council of Small Business of Australia (COSBOA) must be in total awe of what the Minerals Council has achieved.  Then again it has a distinct lack of high profile billionaires to call upon to wind up the media. Two million active SME enterprises employ 5.1...

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ASX Releases Final Changes to Corporate Governance Principles and Recommendations

facebook Twitter LinkedIn RSS On 30 June 2010 the ASX Corporate Governance Council released marked-up amendments to the Second Edition August 2007 of the Corporate Governance Principles and Recommendations (ASX CGPR’s). The key changes (in summary ) are: Gender diversity – ASX listed entities will be required to disclose their achievement against gender objectives set by their board and the proportion of women on the board, in senior management and employed throughout the whole organisation. Remuneration – A new recommendation that remuneration committees comprise of a majority of independent directors, chaired by an independent director, and with at least...

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Step-by-Step Guide for Complying with Modern Award Transitional Provisions

facebook Twitter LinkedIn RSS – What are transitional provisions? Prior to the introduction of Modern Awards on 1 January 2010, employees in different parts of Australia may have performed the same duties, though were subject to different minimum rates of pay. The Modern Award transitional provisions are designed to transition award employees, over 4 years, from their previous minimum wage, to the new Modern Award rates, so that by 1 January 2014 each Fair Work employee, for each classification under each Modern Award, will have the same minimum rate of pay apply to their employment. – When will transitional provisions commence? Transitional provisions commence on Thursday, 1 July 2010.  On this day they will act to change the minimum wages of many award employees. – How do transitional provisions operate? The following is a step-by-step guide to applying the transitional provisions which appear in most Modern Awards. Step 1:  Determine the minimum wage as at 31 December 2009 (31/12 Award Rate) For award employees, this will be the minimum wage rate determined by a NAPSA (former State Award) or an old federal award. For non-award employees, this will be the previous Federal Minimum Wage, being $543.90 per week, or $14.31 per hour. Step 2: Determine the Modern Award rate as at 30 June 2010 (30/06 Award Rate) This is the Modern Award rate that applies as at 30 June...

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Fair Work’s Minimum Wage Increase – How will this affect my business?

facebook Twitter LinkedIn RSS On 3 June 2010, the Minimum Wage Panel of Fair Work Australia granted its first minimum wage increase. – When will the Minimum Wage increase take effect? The increase to minimum wages will operate from the first pay period after 1 July 2010. – What is the Minimum Wage increase? The increase is  69¢ per hour or $26 per week . The new minimum casual loading will also increase to 21%. – How do I apply the Minimum Wage increase? For award employees, the Minimum Wage increase applies to wage rates by increasing the relevant Modern Award rate by $26 per week, or 69¢ per hour. Published Modern Awards are currently being revised to reflect the wage increase, and it is anticipated that they will be available prior to 1 July 2010. For employees not covered by a Modern Award, the Federal Minimum Wage continues to apply and will also increase by these amounts bringing the new Federal Minimum Wage to $15 per hour, or $569.90 per week. – What about the transitional provisions which will commence on 1 July 2010? Most Modern Awards contain transitional provisions which are also due to commence on 1 July 2010. The transitional provisions should be applied to the Modern Award rates once the wage increase has been applied. For more information on how to apply transitional provisions, see...

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Australian Corporate Governance Wrap May 2010

facebook Twitter LinkedIn RSS In this blog we cover: ASX: Lies, Damned Lies and Statistics (Directors’ Trading) ASIC Capitulates on Rumourtrage and Handling Confidential Information Fat Fingers – You’ve got to be joking! Other Governance Stuff ASX: Lies, Damned Lies and Statistics (Directors’ Trading) If you were wondering why the ASX was being stripped of its market supervision powers, you might get a little insight from its latest media release relating to Q1 2010 director’s trades. The headline result, bolded for good measure, was that only 3 or 0.4% of on-market trades by directors during the Q1 2010 period were “confirmed” (ASX emphasis) as contraventions of their organisation’s trading policies.  On first read you’d think “great result” obviously ASX is doing a good job. But surely ASX must have been thinking… let’s hope no one actually reads the report… which indicates a whopping 41.1% or 315 in total, (bolded by us for good measure) of on-market trades by directors actually occurred during blackout periods. ASX’s take on this, “Trading by directors during a blackout period is an important public issue that impacts on overall confidence in the integrity of the Australian market. While such trading is not prohibited by law, it can indicate poor corporate governance practice and create the perception of market misconduct…” So we ask, if it’s such an important public issue, why aren’t the 41.1%...

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The New International Risk Management Standard AS/NZ ISO 31000 – What You Need To Know

facebook Twitter LinkedIn RSS On 15 November 2009 the Australian Standard for Risk Management AS/NZ 4360:2004 was superseded by the new International Standard for Risk Management AS/NZ ISO 31000:2009. Published at about the same time were: ISO/IEC 31010:2009 a supporting standard for ISO 31000 which provides guidance on selection and application of systematic techniques for risk assessment. ISO Guide 73 – Risk Management Vocabulary which, as the name suggests, provides guidance in the use of risk management terminology with the aim of encouraging a coherent approach in this area. Together, these ISO documents create the new international risk management standard and provide practical guidance for those organisations that are either required by law, or are voluntarily seeking, to implement an effective risk management program. What are the differences between AS/NZ 4360:2004 and AS/NZ ISO 31000:2009? The good news for Australian and New Zealand organisations is that ISO 31000 is based on AS/NZ 4360, with the familiar 7 Step Risk Management Process being retained, more or less, intact. What ISO 31000 does, that AS/NZ 4360 didn’t do, is to: clearly articulate the key attributes that enable a risk management program to be managed effectively (these are referred to as the 11 Risk Management Principles); and make it clear that the 7 Step Risk Management Process must be implemented through an effective Risk Management Framework that will allow it to be...

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Independent Contractors – Everything you need to know to minimise your risk

facebook Twitter LinkedIn RSS The Australian Federal Government has released a 76 page booklet titled “Independent Contractors – The Essential Handbook” together with an excellent on-line “Contractor Decision Tool” which is designed to assist workers and businesses determine whether they have a genuine independent contractor relationship, or whether they are at risk of being found to have entered into a “sham contracting arrangement”. There is currently no single definition of an “independent contractor”.  In order to determine whether or not an individual is an “employee” or an “independent contractor” courts will look at all the circumstances of a working relationship.   To make matters more complex, different rules apply with respect to occupational health & safety, workers compensation insurance, superannuation, personal services income taxation, GST and payroll tax. The mere fact that a person has an ABN, or a contract that says that they are an “independent contractor”, does not mean that this individual is an “independent contractor”. Each relationship must be examined separately to determine whether or not it is a contract for “service” (an employee) or a contract for “services” (an independent contractor). Many employers struggle to fully understand the risks of engaging workers as independent contractors when they should in fact be engaged as employees.   The risks are significant and include: Back pay claims from individuals that have been engaged as contractors where the relationship should have...

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Australian Corporate Governance Wrap April 2010

facebook Twitter LinkedIn RSS Note down April 2010 as the month in which the term “bankster” first hit the media as journalists and governance commentators scrambled to find superlatives with which to describe the activities of leading investment bank Goldman Sachs. In this blog we cover: “Banksters” and the Vampire Squid (aka Goldman Sachs & friends) Governance Free Zones Exposed in Corporate Autopsies Gravy Train Slows for Financial Planners Liquidators Feeding off Corporate Corpses (aka Senate Enquiry into Liquidators Practices) ASX Changes the Rules of Engagement Fair Work Transitional Arrangements Deadline Looms “Banksters” and the Vampire Squid (aka Goldman Sachs & friends) In the most simplistic of terms, Goldman Sachs is facing fraud charges for allegedly having coaxed clients into investing in products that, according to internal emails, it’s staff believed  were “crap”, “shitty”, “junk” and ‘”lemons”   These products were partly backed by sub prime mortgage securities that the company expected to fail.  At the same time, Goldman Sachs was shorting its own position – effectively betting against its clients because of its belief that the housing market was overheated and about to collapse. Whatever the outcome of the fraud investigation it seems that this latest example of the 80’s “greed is good” mentality may have finally tipped the scales causing risk managers to push the likelihood of a strong regulatory response up the risk register into the...

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