Conflict disclosure at top companies found wanting
A troupe of public sector and industry superannuation funds have demanded Australia’s biggest companies more clearly disclose how they make sure their directors do not funnel investor funds into external personal interests.
Their request comes on the back of damning research carried out by BT’s governance advisory service (GAS), which was commissioned by six super funds.
It found 160 companies within the ASX 200 conducted $6 billion in director-related business between them. The research found 167 of the 958 company directors served on two or more boards.
In almost a third of the 160 cases, transactions with director-related entities were either not disclosed properly, not disclosed at all, or were of a size that would create suspicion that a conflict of interest had occurred.
The results have raised concerns that those companies without adequate or transparent conflict controls could find themselves in trouble with corporate regulators.
GAS head Eric Mather went as far as to suggest that a regulatory response “would severely diminish the pool of available director talent”.
Catholic Superannuation Fund chief investment officer Tim Hughes called for directors to properly disclose their interests or risk losing the trust of superannuation funds.
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