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Corporate governance reforms welcome: committee chairman.

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MEDIA RELEASE SENATOR GRANT CHAPMAN Liberal Senator for South Australia

8 December 2005


The Chairman of the Joint Parliamentary Committee on Corporations and Financial Services, Senator Grant Chapman (Liberal, SA) welcomed today’s Government response to the Committee’s June 2005 Report on the Inquiry into the Exposure Draft of the Corporations Amendment Bill (No.2) 2005.

“I welcome the Government’s overwhelming positive response to the reforms proposed in the Committee’s report,” Senator Chapman said.

“These reforms pave the way for a much improved suite of practices governing corporations’ interactions with their shareholders.”

“I particularly welcome the Government’s acceptance of a recommendation to remove the ‘100 member rule’ for managed investment funds in favour of a threshold of five per cent of the votes to be cast. This allows for a sensible consistency between the requirements for companies and managed investment funds and brings Australia in to line with relevant international standards.”

“The Government’s acceptance of the recommendation to omit a measure allowing any 20 members to place resolutions on the agenda for annual general meetings is also a rational approach towards a proposal that was overwhelmingly opposed in our hearings and may have seen an undesirable explosion in the number of resolutions put.”

“The Committee’s report included a recommendation to reduce the "cherry picking" of proxy votes and, pleasingly, the Government also accepted this recommendation. It is only reasonable for a shareholder to expect that a proxyholder will exercise their vote as directed.”

“I also welcome the Government’s support for a Treasury investigation of strategies to encourage use of direct voting consistent with the amendments introduced to facilitate electronic proxy voting as part of the CLERP 9 reforms. This should allow for future reforms allowing shareholders to cast pre-poll votes either on paper or electronically, and in so doing reduce the need for proxies.”

“These reforms will go a long way towards redressing the balance of power between minority special interest shareholder groups and the greater majority of shareholders. It will see that shareholder resources are used responsibly to reflect the wishes of the majority. I look forward to their passage through legislative amendments to the Corporations Act,” Senator Chapman concluded.

The Committee’s report on the Inquiry into the Exposure Draft of the Corporations Amendment Bill (No.2) 2005 can be found on the following website: index.htm

Media enquiries: Senator Chapman (08) 8231 9611 / (02) 6277 3630