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Democrats to strengthen CLERP 9 on corporate governance.



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DEMOCRATS MEDIA

Democrats to Strengthen CLERP 9 on Corporate Governance

SENATOR ANDREW MURRAY AUSTRALIAN DEMOCRATS TAX, FINANCE AND CORPORATE AFFAIRS SPOKESPERSON

04/452 FRIDAY 4 JUNE 2004

The Australian Democrats today welcomed the first of two Committee Reports on CLERP 9. Long-term member of the Joint Standing Committee on Corporations and Financial Services Senator and Democrats Corporate Affairs spokesperson Senator Andrew Murray said the Committee's recommendations, plus proposed Democrat amendments, will significantly strengthen corporate governance for the benefit of Australian shareholders and the broader community.

"CLERP 9 will be a hotly debated bill. Our amendments mean that the Democrats will be in the thick of a fight again. We stand for much stronger corporate governance" Senator Murray said.

"The Australian Democrats continue to be strongly supportive of the process and intent of the Corporate Law Reform programme. Over nearly a decade of reform, we have been engaged in the community, various Committees, in the Senate and involved at every stage of the CLERP process, as well as FSR and all the previous manifestations.

"The legislation is not really disturbing the fundamental relationship between shareholders, executives, directors and the auditor. That is a weakness. That relationship does need to be changed and in our minority report we have outlined new directions for the Government and business community to consider," Senator Murray said.

"The Democrats recognise that in some areas CLERP 9 makes considerable leaps forward in terms of accountability and good process. However, our amendments, combined with those of the Labor Party, will give the reforms some real teeth".

The Democrats amendments will include: • Requiring disclosure of all executives and employees packages that are more than 20 times the full-time adult ordinary time earnings. Based on the December 2003 weekly figure of $937.70, this would require reporting of all remuneration packages of over $975,208; • Requiring a binding vote to approve the remuneration and retirement packages of all directors whether

executive directors or non executive directors; • Amending 249D to ensure that such members hold marketable parcels of shares, which could be defined as a minimum of 100 shares per shareholder at a value of not less than $500 per parcel. • Extending the requirement to vote on material corporate governance resolutions to fund managers;

and

• Requiring shareholders of companies to approve a political donations policy at least once every three years.

"This is a once in a lifetime opportunity for real reform to ensure that future Australians don't have to suffer the losses and systemic corruption that caused disasters like Enron and HIH," Senator Murray concluded.

Media Contact - Senator Andrew Murray - 0419 958 038