Views on improving the integrity of global capital markets
04 September 2013

Corp Gov Roundup: Proxy Voting, “Female Empowerment,” Sovereign Wealth Fund Appointments

From proxy voting infrastructure in Canada and the new Companies Bill in India to an impending sovereign wealth fund board appointment in Norway, it’s time to span the corporate governance globe to review important developments from the month of August.


The ASX Corporate Governance Council has been busy.  On 16 August the council released proposed changes to the market’s corporate governance principles and recommendations.

This will be the third overall update to the code since 2007. The council is asking for feedback on tightening the definition of an independent director to exclude from that classification those who have served in excess of nine years and those who are affiliated through material transactions in the past three years.

Another change seeks to establish a risk committee, either on a standalone committee or as part of the audit committee. The draft code also recommends risk management reviews annually.

Finally, the council speaks to the growing attention paid to environmental, social, and governance (ESG) concerns by those in the investment community. To that end, it calls on companies subject to the code to disclose whether and how it “has regard to economic, environmental, and social sustainability risks.” The council also asks for companies to address the subject of diversity objectives set by boards.

The council is inviting comments from all interested stakeholders on the consultation materials. Submissions are due by Friday, 15 November.

Meanwhile, the Australian Council of Superannuation Investors announced updates to its governance guidelines, with emphasis on executive pay.


The Canadian Securities Administrators (CSA), a council of Canada’s securities regulators, is asking for comment on a Review of the Proxy Voting Infrastructure.

The consultation focuses on vote reconciliation and confirmation, and whether a vote confirmation system should be introduced.

The report also addresses share lending, the use of voting agents, identification of beneficial and non-beneficial owners, and both omnibus and restricted proxies.

Public comment on the consultation paper will inform the CSA’s next steps, which could include the development of an ad-hoc advisory committee to provide the CSA with different stakeholder perspectives, as well as public consultation sessions.

The comment period is open until 13 November.


In India, the new Companies Bill passed the upper house of Parliament. The bill requires that every listed company appoint at least one-third of the total number of directors as independent directors for a maximum of two terms of three years each. A certain class of companies will be required to have at least one female director. Furthermore, directors are barred from holding more than 10 directorships in publicly traded firms.

The bill also contains provisions giving shareholders the right to file class-action suits and sets up a National Company Law Tribunal as a first step in the judicial process for investors harmed by mismanagement or fraud.

The law also calls on large companies to form a board-level corporate social responsibility committee comprised of three or more directors, at least one of whom must be independent. The committee is responsible for a company’s corporate social responsibility policy, and it must report on how the company executes on the policy.


The Tokyo Stock Exchange (TSE) has calculated an index of companies with strong “female empowerment” practices that has outperformed the benchmark TOPIX index. The index was calculated using the highest scoring companies based on the empowerment of women. The index of companies with strong female empowerment outperformed the TOPIX index by more than 7%.


When Norway’s US$760 billion sovereign wealth fund makes a policy change, the world takes notice. After all, the fund owns on average 1.25% of every listed company in the world; its average stake in European companies is 2.5%.

In August the fund announced that it is engaging more by appointing a corporate governance advisory board.

According to the fund, “The board will provide input on board nomination practices at the fund’s listed companies, serve as an advisory body on active ownership, and regularly assess ownership activities relative to best practice.”

The Financial Times reported that the board will be comprised of Peter Montagnon, a former adviser at the U.K.’s Financial Reporting Council; John Kay, Financial Times columnist and author and CFA Institute Future of Finance council chair; and Tony Watson, former chief of Hermes Investment Management and a director at Vodafone, Lloyds Banking Group, and Hammerson.


The Singapore Exchange announced that it will usher in new listing rules that improve corporate governance. The new rules require companies to hold shareholder meetings in Singapore, vote by poll for all resolutions (in many cases voting is currently done by a show of hands), and better disclose voting results. The rules are meant to help spur engagement between issuers and shareowners as well as improve the transparency of Singapore-listed companies.

Companies have a two-year period to implement the poll voting processes and disclosure of voting outcomes, though the exchange “encourages” all companies and trusts to adopt voting by poll as soon as possible.

United Kingdom

In the United Kingdom, the Department for Business Innovation & Skills released a paper, Transparency & Trust: Enhancing the Transparency of U.K. Company Ownership and Increasing Trust in U.K. Business.

The paper focuses on two main areas: 1) transparency, making beneficial ownership of a company more open, and 2) trust, making directors more accountable by changing some of the rules around directors’ duties and disqualifications.

Comments are requested by 16 September.

Photo credit: iStockphoto/YinYang

About the Author(s)
Matt Orsagh, CFA, CIPM

Matt Orsagh, CFA, CIPM, is a director of capital markets policy at CFA Institute, where he focuses on corporate governance issues. He was named one of the 2008 “Rising Stars of Corporate Governance” by the Millstein Center for Corporate Governance and Performance at the Yale School of Management.

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