We recognise the vital role good corporate governance plays in contributing to markets that are fair, efficient and transparent, and to ensuring stakeholders’ interests are respected.
Appropriate processes and systems help to manage risks and allow those in governance roles to focus on growth, value creation and the long-term sustainability of their businesses.
The approach taken in this handbook recommends that boards provide sufficient meaningful information to show how they meet nine high-level principles:
- Ethical standards: Directors should set high standards of ethical behaviour, model this behaviour and hold management accountable for delivering these standards throughout the organisation.
- Board composition and performance: To ensure an effective board there should be a balance of independence, skills, knowledge, experience and perspectives.
- Board committees: The board should use committees where this will enhance its effectiveness in key areas, while still retaining board responsibility.
- Reporting and disclosure: The board should demand integrity in financial reporting and in the timeliness and balance of corporate disclosures.
- Remuneration: The remuneration of directors and executives should be transparent, fair and reasonable.
- Risk management: Directors should have a sound understanding of the key risks faced by the business, and should regularly verify there are appropriate processes to identify and manage these.
- Auditors: The board should ensure the quality and independence of the external audit process.
- Shareholder relations and stakeholder interests: The board should respect the rights of shareholders, and foster constructive relationships with shareholders and stakeholders. Shareholders should be encouraged to engage with the entity.