On October 2cd, the ASIC released a review by their Corporate Governance Taskforce. This review was the first in a series of reviews examining corporate governance practices. James Shipton launched this report with a by addressing the Australian Institute of Company Directors. You can find that speech here.
Globally, there is an increasing need to recognise the impact of issues around goverance, individually and collectively. There is also an awareness on the impact they can have on the customers and the industry as a whole.
The review revealed that boards were grappling to oversee non-financial risk. Their oversight was less developed than expected. This is in contrast to the approach to financial risk for these organizations. That appraoch well developed with metrics to assess success or failure.
They also found reliance on metrics that are ‘lag indicators’. The ASIC sugguests that boards develop more ‘lead’ and ‘proxy’ indicators for non-financial risks.