29 June 2019

Leading with Purpose

GILES RAFFERTY, Corporate Communications and Media Advisor


We are fast approaching the first reporting season under the 4thedition of the ASX Corporate Governance Principles and Recommendations. An aspect of the new Principles and Recommendations, which we wrote about in our March 28th Purpose for the Board’ blog, is the elevation of responsibility for linking a company’s values, purpose and strategic goals to Board level. This reporting season is also the first under the Modern Slavery Act, where companies generating revenue in excess of $100 million will have to report on the risks of their business contributing to slavery and what they are doing to address those risks. More broadly, the trend amongst investors for more visibility on a company’s ESG performance is building momentum for the adoption of Integrated Reporting, which is intended to give a better view of the total value created by a company.

Purpose drives good decision making

At First Advisers we believe it has always been important for companies to have a clearly defined, authentic and well expressed purpose and never more so then now, to help companies meet the requirements of the changing reporting landscape. A clear purpose is more than an aspirational statement of good intent. A company’s purpose will underpin its social license to operate; guide and align appropriate behaviours and decision making within an organisation and motivate and retain employees. Purpose is a driver of operational success.

Compliance rules creating cultural risks

Earlier in June I attended a University of New South Wales Business School forum focused on the topic of Ethical Leadership in an Accelerating World. There were several themes discussed within the forum but one in particular resonated strongly with why purpose needs to be at the core of how companies operate. The keynote speaker, Dr. Simon Longstaff, Executive Director at the Ethics Centre, noted that while many damning revelations emerged from the Banking Royal Commission it also emerged that the problems within the financial services sector were not caused by an absence of rules, laws or compliance controls.

“There’s not a problem about there not being enough rules or laws, the sorts of ethical failures and the costs that flow from that both in terms of human lives and also economic costs are a product of a cultural failure in which people have not been able to exercise the kind of ethical restraint which is required to say I know I could do it but we won’t”
Dr. Simon Longstaff Executive Director, The Ethics Centre

Conscious subversion a key trait of good leadership

This observation highlighted the need for leadership, which Dr. Longstaff characterised as being an inherently ethical practice, that linked how a company operated back to its purpose, values and principles. The idea of the leaders’ roles being linked to making a company purpose led does not dismiss the need for control and compliance frameworks. Instead it empowers all employees, guided by the company’s purpose, to make better decisions when dealing with circumstances that don’t fit neatly within the control framework. Dr. Longstaff express the view that the exercise of control and compliance was a function of management while it was up to leaders to consciously subvert any unthinking customs and practices, within a company, that might prevent it from fulfilling its purpose.

Leaders need to embed a purpose in their organisations

Alongside the requirement for Boards to be accountable for linking a company’s values, purpose and strategic goals, recommendation 3.1 of the ASX Corporate Governance Council also requires the Board to hold a company’s senior leadership team accountable for embedding those values across the organisation and setting the ‘tone from the top’.



FIRST Advisers’ Purpose Communicating program is designed to help Boards and senior executives define their company’s purpose and values; build a strategy to communicate them internally and over time test how well understood they are within the organisation. We work with companies to make sure they meet the new standards for good governance.

 

 

 

 

4 June 2019

Time for Proxy Advisors

GILES RAFFERTY, Corporate Communications and Media Advisor AGM season may seem a long way off for many ASX listed companies but June and July are prime time for engaging with proxy advisors in advance of the peak months of proxy season, between August and October. Proxy advisors play a vital role in helping inform investment […]

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28 March 2019

Purpose for the Board

GILES RAFFERTY, Corporate Communications and Media Advisor A listed company’s Purpose is now, very much, a matter for Board consideration. The latest edition of the ASX’s Corporate Governance Principles and Recommendations makes it clear the Board is responsible for linking a company’s Purpose to its strategic goals. Principle 3 states a listed entity should instil a […]

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4 March 2019

Cybersecurity: reported data breaches surge almost 700% in 2018

As we mark the one-year anniversary of the introduction of the Federal Government’s Notifiable Data Breach (NDB) scheme, the headlines focused on cybersecurity breaches seem to be coming thick and fast. The attack in early February 2019 on the Australian Federal Parliament’s computer network, has been identified by Prime Minister Scott Morrison as the work […]

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4 March 2019

ASX Governance Recommendations

ASX Corporate Governance Council (the Council) launched its 4th Edition of the Corporate Governance Principles and Recommendations on 27 February after more than a year of consultation. It includes input from the nineteen diverse member groups of the ASX Corporate Governance Council, including associations representing the interests of shareholder groups (ASA) and listed companies who are communicating […]

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31 January 2019

The importance of being purposeful

A well understood and expressed corporate purpose drives long term value. This is why purpose, as a driver of profitability, was a central theme of the 2019 letter from Larry Fink, CEO of Blackrock, the world’s largest investment manager, to the Board’s and senior managers of companies Blackrock has holdings in. It has also been the […]

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29 November 2018

Interesting times: 2018 in review

Giles Rafferty, Media and Corporate Communications “May you live in interesting times”, is often presented as a Chinese curse and, as we enter the final month of 2018, it has certainly been an interesting year thus far. In Australia, the Banking Royal Commission has been the dominant story in the financial media during the latter […]

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2 October 2018

Make AGMs great again!

Giles Rafferty, Corporate Communications Annual General Meetings (AGMs) have to happen, it’s the law.  Consequently, the AGM is a regular fixture in a listed company’s financial calendar when the Board can be sure stakeholders are looking their way. This also makes the AGM a valuable communication moment. There are, of course, a number of necessary […]

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27 July 2018

ESG IS MAINSTREAM ON MAIN STREET

Ben Rebbeck, Executive Director Environmental, Social and Governance (ESG) factors were once the poor cousins of institutional investors’ metrics – nice to have, but not a primary driver of valuation or investment. This is no longer the case. Times have changed, investors are more sophisticated, information is more prevalent and reliable – ESG is now […]

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29 June 2018

A view from the other side of the fence

Daniel Jones, Shareholder Analytics and IR Activism was once again a hotly discussed topic at the 2018 National Investor Relations Institute (NIRI) conference in Las Vegas, and with the number of large-cap activist campaigns in 2017 reaching an all-time high, it’s easy to see why. Based on my observations and discussion with professionals, an often […]

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29 June 2018

ASIC Review of Proxy Adviser Engagement Practices

Victoria Geddes, Executive Director Following FIRST Adviser’s ‘Time to talk to Proxy Advisers’ post last month, ASIC has published its review of proxy adviser engagement practices. The Australian Securities and Investments Commission acted after business organisations complained some proxy firms are unwilling to engage, correct inaccuracies or give time for companies to clarify errors. ASIC’s […]

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29 May 2018

ASX to make purpose key to good governance

Giles Rafferty, Corporate Communications and Media Advisor The Financial Services Royal Commission is shining a light on governance failures at some of Australia’s largest businesses. It has also revealed a clear need to restore trust in Australian listed companies. The ASX Corporate Governance Council is seeking to address the trust deficit by updating the Principles and Recommendations […]

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29 May 2018

Time to Talk to Proxy Advisers

Victoria Geddes, Executive Director It seems a strange thing to put on the IR agenda, with AGM season still 5 months away for most Australian companies, but June and July are the months when companies are best placed to gain access to proxy advisors outside the peak months of proxy season (April, May, September, October, […]

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30 April 2018

Mandatory Reporting of Data Breaches in Australia is Off and Running

Victoria Geddes, Executive Director, Writing for the Autumn 2018 Issue of Listed@ASX On February 22, 2018 the Federal Government’s new Scheme for the mandatory reporting of cybersecurity breaches that result in the loss of personal data came into effect. Every private and public company with annual turnover of $3 million or more, listed or not, is […]

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4 October 2017

RETAIL SHAREHOLDER MEETINGS: LESSONS FROM ACROSS THE DITCH

Ben Rebbeck, Executive Director Kiwis have for some time been seen to be leading their Aussie cousins in numerous areas of social, commercial and legislative progress.  And Investor Relations, specifically in relation to retail-focused shareholder meetings, is no exception. It is easy for Australians to make excuses as to why so often New Zealand leads the […]

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4 October 2017

AGM’s and the changing voting landscape

Dan Jones, Shareholder Analytics & Investor Relations With results and subsequent investor roadshows behind them, many companies have turned their attention to their upcoming AGM. Along with considerations such as shareholder presentations, Q&A preparation, requirements of shareholder analytics and/or proxy solicitation support, etc. thought should also be given to how the voting landscape is continuing to […]

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1 August 2017

The Evolving Board Role in Determining Corporate Culture

Philippa Ellis, Governance & Investor Relations Not a day seems to go by without some headline homing in on yet another corporate scandal with its genesis often attributed to a lax or loose corporate culture. In Australia it has most recently focused on the wealth management and life insurances divisions of the major banks. ASIC […]

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3 July 2017

How to Engage with Passive Investors this Reporting Season

David Whittaker, Senior Investor Relations Adviser The growth in passive investing is one of the biggest shifts occurring in global capital markets. Passive funds now hold as much as 40% of total US equity market assets, up from around 20% a decade ago*. However, very few companies are adjusting their IR strategy to take account […]

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9 June 2017

The Importance of Non-Financial Information

NIRI Annual Conference 2017 Ben Rebbeck, Executive Director On 4 June 2017, the National Investor Relations Institute (NIRI) Annual Conference got underway in Orlando, Florida. This Conference brings together over one thousand of the world’s thought leaders and senior professionals in Investor Relations and it is one that we have been attending religiously for the past […]

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5 October 2016

Innovation: the new paradigm in Registries – or is it?

RACHEL SAKURAI, COMPUTERSHARE INVESTOR SERVICES GM QUEENSLAND Fintech, blockchain, disruption, innovation – these are the buzzwords and hot topics that currently saturate the airwaves and are almost certainly not ones that would spring to mind when thinking about big process-driven registry companies. For listed companies the process of signing up a registry provider for the […]

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5 July 2016

Surviving Brexit: Disclosure and guidance in uncertain times

Ben Rebbeck, Executive Director If there is one consistent thing the financial markets are saying about Brexit, it’s that there are uncertain times ahead for every major economy – and by extension, for the prospects and financial performance of every major company. When uncertainty reigns, we often hear management or Boards describe disclosure and guidance […]

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27 May 2016

Follow FIRST Advisers at the World’s Premier Investor Relations Conference

FIRST Advisers will be in San Diego next month at the premier global conference for investor relations professionals, staged by the US National Investor Relations Institute (NIRI). We will be posting live updates from our Twitter account and filing a post conference wrap up on this blog. The NIRI conference often provides a leading indicator for […]

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1 July 2015

ASX’s New Continuous Disclosure Guidelines Apply From Today

Philippa Ellis, Corporate Governance & Company Secretarial ASX Guidance Note 8 Continuous Disclosure (GN8), which expands the guidance on earnings surprises, publication of analyst forecasts and consensus estimates, and investor briefings, comes into force today (July 1). The ASX released its consultation paper outlining its proposed changes to GN8 in March 2015. On June 22 […]

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18 May 2015

Guidance to go out of fashion?

The new ASX guidelines may discourage companies from making earnings predictions public The proposed changes to the guidelines for listed companies on their continuous disclosure obligations (ASX Guidance Note 8) will provide greater clarity and a more pragmatic approach for companies that find themselves facing a sudden change in their profit expectations and want to […]

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