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Jeckyll and Hyde result for new corporate governance survey within Australia’s largest companies As another financial year ends we see the results of an important survey released regarding corporate governance based on annual reports for Australia’s top 250 companies. The global finding of the 2008 WHK Horwath Corporate Governance Report is that the corporate governance structures and policies of Australia’s top 250 companies can be described as having “Jekyll and Hyde” traits. The report findings, independently compiled by the University of Newcastle Associate Professor Jim Psaros, are based on surveys conducted over the past six years. “The surprising result of this survey is the increased polarisation of the policies, procedures and practices of Australia’s top companies, said Jim Psaros, Associate Professor. The good news is that the number of companies awarded five-stars because of their excellence in corporate governance has increased. The sobering bad news is that the number of companies obtaining one-star because of their significant deficiencies in corporate governance has also increased.” The good news While all 40 companies that achieved a five-star rating have outstanding corporate governance structures and policies, there were six companies that jointly topped the list. In alphabetical order they were Adelaide Brighton, Ansell, Crane Group, CSR, PaperlinX, and Perpetual Trustees. Evident from their five-star ratings, and 1st placing, the corporate governance structures of these six companies could not be faulted as they met all criteria considered in the WHK Horwath model. There are only three companies that have achieved a five-star rating for all six Corporate Governance Reports (ie. David Jones, Santos, and Woolworths). To achieve excellence in corporate governance, over a relatively lengthy period of time, demonstrates a real and on-going commitment. The bad news Perhaps the most concerning finding of the report relates to the increase in the number of companies that obtained a one-star rating. Ten companies (4%) were assessed as one-star compared to six companies (2.4%) in the 2007 analysis and four companies (1.6%) in the 2006 Report. In essence a one-star rating means that corporate governance structures were lacking in most key areas. Almost without exception, the Board of Directors and the associated committees (where they existed), contained no independent members. John Gavens, Audit & Assurance, WHK Horwath said “We are strong supporters of helping companies deliver robust corporate governance because good corporate governance structures encourage companies to create value (through entrepreneurialism, innovation, development and exploration) and provide accountability and control systems commensurate with the risks involved”. To download the full report valued at $499 free of charge for the next 60 days, simply click below and complete your details. * Refer to our privacy policy for further information. 2008 WHK Horwath Large Cap Corporate Governance Report |
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