Australian directors concerned about new guidelines

Melbourne, Australia 26 September 2003

Under half of Australia's listed companies will immediately adopt new corporate governance guidelines from the Australian Stock Exchanges designed to improve the amount of information provided to investors.

A survey published by the Australian Institute of Company Directors reveals serious concerns about the guidelines. Only two of every five companies say they will follow the guidelines.

More than two-thirds of the 371 company directors surveyed said they supported the guiding principles of the new code, but 70 per cent thought the recommendations were too prescriptive.

60 per cent thought that the rules could lead to people becom ing unwilling to serve on boards, resulting in a shortage of good directors. Only 13 per cent of directors believed the code would improve corporate performance.

Since more than half of the respondents represent top 500 companies in Australia, the survey will be of concern to the AFX which has taken the lead in corporate governance, and, as reported on Corporate Governance, is keen to join an international alliance including Canada and countries of the European Union.But Karen Hamilton, the senior officer at ASX responsible for corporate governance, was reported by the Melbourne newspaper The Age as saying that the questions “appeared loaded and might not have elicited meaningful feedback".

AICD survey

Full details of ASX code available on this site under country listings Australia