Australian Governance Glossary of Terms
The Australian Institute of Company Directors (AICD) is a not-for-profit membership organisation for directors.
The AICD advocates policies on issues of interest to directors and represents members on these issues. The AICD also works with legislators, regulators and other stakeholder groups on issues affecting directors and boards.
The Australian Securities and Investments Commission (ASIC) is an independent Australian government body and is this country’s corporate regulator. ASIC administers the Australian Securities and Investments Commission Act 2001 (ASIC Act), and is also generally responsible for administration and enforcement of the Corporations Act 2001. In addition, ASIC publishes guidance and information on many related topics, including corporate governance.
ASIC seeks to:
- maintain and improve the performance of the financial system and entities within it
- promote informed participation by investors and consumers in the financial system
- administer the law effectively
- provide information about companies and other bodies to the public
The Australian Securities Exchange (ASX) is a publicly listed company which functions as a market operator, clearing house and payments system facilitator.
The ASX oversees compliance of the Listing Rules, promotes governance standards and helps to educate retail investors. ASIC and the ASX collaborate to carry out their respective roles and responsibilities effectively.
The purpose of the Corporate Governance Council is to develop recommendations and principles which reflect international good practice. The Council includes representatives from among the following bodies:
· Australian Council of Superannuation Investors
· Australian Institute of Company Directors
· Australian Institute of Superannuation Trustees
· Australian Shareholders’ Association
· ASX Group
· Business Council of Australia
· Chartered Secretaries Australia
· CPA Australia Ltd
· Financial Services Institute of Australasia
· Financial Services Council
· Law Council of Australia
· National Institute of Accountants
· Property Council of Australia
· Stockbrokers Association of Australia
A company is a body corporate that has its status conferred by the Corporations Act 2001.
This term refers to the statement made by a listed entity under listing rule 4.10.3 stating the extent to which it has followed the ASX Corporate Governance Council’s recommendations.
The Corporations Act 2001 (Cth) is an Act of the Commonwealth of Australia which sets out the laws dealing with business entities in Australia at the federal and interstate levels. It deals mainly with companies but also with other entities, such as partnerships and managed investment schemes. The Act is the primary basis of Australian corporations law.
The Corporations Act is the principal legislation which regulates companies in Australia. It covers matters such as the formation and operation of companies (in conjunction with any constitution that may be adopted by a company), duties of officers, takeovers and fundraising.
In the case of an internally managed listed entity, an executive director refers to a director of the entity who is also an executive of that listed entity or a child entity and, in the case of an externally managed listed entity, a director of the responsible entity who is also an executive of the responsible entity or a related body corporate.
A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (a person or group of persons). Typically, a fiduciary takes care of money or other assets prudently for another person.
Independent board directors are those who have not been employed as an executive by a company, have not recently been a partner, director or senior employee of a business providing services to the company, are not substantial security holders in the company, and do not have a material business relationship with the company or a related company.
The ASX Listing Rules deal with listings on the market and the conduct of listed entities, including:
- the admission of entities to the official ASX list
- the quotation of securities on the ASX market
- suspension of securities and removal of entities from the official list
- disclosure and reporting
- other aspects of a listed entity’s conduct, including the issuing of securities, the holding of meetings, and the conduct of certain transactions
The ASX Listing Rules are enforceable under the Corporations Act and entities agree to be bound by them upon admission to the ASX.
In the case of a listed company, security holders refers to shareholders, and in the case of a listed trust, this term means unit holders.