Corporate governance adviser RiskMetrics hosted its annual conference in Melbourne yesterday and generated plenty of press from a range of interesting speakers.
Unfortunately, Federal Superannuation and Corporate Governance minister Nick Sherry wasn’t one of them as he produced a pretty dull summary over lunch of the government’s rather modest corporate governance reform program.
Whilst Kevin Rudd and his ministers are happy to blast the Howard government on issues such as industrial relations, spending binges, inflation and foreign policy, there is a mysterious reluctance to go anywhere near a firm clamp down on corporate malfeasance.
Sure, we might get some more disclosure of short-selling but Sherry yesterday suggested we’re heading for even less liability for Australian directors.
Maybe it’s the influence of Allco Finance Group director Sir Rod Eddington, who chairs Rudd’s Business Advisory Council. One prominent public company director told me recently that “Sir Rod has done a great job keeping Rudd under control.”
Whatever the reason, Sherry’s limp performance yesterday means it is time to take off the gloves.
ASIC’s record on insider trading is widely regarded as a joke, yet Labor has been nowhere to be seen on this score. The same goes with director dealings where the ASX “guidelines” are being widely ignored.
Indeed, Sherry yesterday declared that ASIC and ASX had done “a solid job” during the recent market turbulence, when the facts would suggest otherwise.
There can be no starker key performance indicator for ASIC than its incarceration rate. The full list of ASIC’s 317 jail victims is here and the numbers break down as follows:
1991: 6
1992: 8
1993: 13
1994: 10
1995: 24
1996: 16
1997: 22
1998: 22
1999: 21
2000: 32
2001: 18
2002: 22
2003: 15
2004: 28
2005: 18
2006: 20
2007: 17
2008: 4
Last year was ASIC’s second lowest jail harvest in a decade. The long term batting average to is to jail someone every 17 days, yet it has now been 31 days since the last sentencing of a no name corporate crook, Sydney spiv Tunde Doja.
Australia has just suffered its greatest loss of confidence in financial markets in 15 years due to a series of collapses, poor disclosure, conflicts of interest and dodgy governance yet the government and regulators appear almost comatose.
Despite no direct sub-prime exposures, we’re punching well above our global weight for corporate scandals and the Minister gives ASIC an elephant stamp for “solid” performance at the end of April as ASIC tracks towards only jailing 12 people in an entire year and has charged precisely no-one yet over the recent scandals.
Can someone please lob a rocket under Nick Sherry or put a goer into the portfolio such as Bill Shorten or Greg Combet, both of whom have sat on multi-billion dollar superannuation boards and understand the importance of protecting Australia’s $1.2 trillion super pile?
Check out this video interview with RiskMetrics boss Dean Paatsch after yesterday’s conference.
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