Review of Commonwealth Government Business Enterprises ...

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3.5 Annual Reports
3.5.1 The annual reporting process is an important element of the GBE governance framework
via which GBEs are required to review and report on their on-going performance against
publically stated performance measures. To facilitate this on-going monitoring and
scrutiny of performance, annual reports are to contain the information necessary to
enable an informed assessment of the GBEs performance against the broad performance
36, 37
expectations that have been included in the previous year’s SCI.
3.5.2 The development and maintenance of frameworks and practices which facilitate
transparency, accountability and disclosure are at the core of strong corporate governance.
Although strong corporate governance is not a guarantee of future performance, many
experts agree that there is a strong correlation between sound corporate governance and
sound corporate outcomes in both the private and public sectors. A well governed GBE
will be more likely to be effcient and to produce effective outcomes.
3.5.3 Accordingly, Finance considers that the quality of the reporting would be enhanced by
requiring GBEs to include a statement summarising the corporate governance practices
of the GBE in their annual reports. To ensure consistency in reporting across the various
GBEs, the report is to refer to the governance reporting guidelines set out in the CAC Act.
3.5.4 The Auditor-General may conduct a performance audit of a Commonwealth authority or
a Commonwealth company that is a GBE, or of any of its subsidiaries, if the Shareholder
Minister(s) or the Joint Committee of Public Accounts and Audit request the audit.
Following completion, the report of the audit is to be tabled in both Houses of Parliament
as soon as possible. Finance proposes to update the GBE Guidelines to refect these
aspects of the accountability framework.
Proposed Change:
2.11 3.13 The directors of GBEs are required to provide an annual report or the annual general
meeting documents, to the Shareholder Minister(s). The portfolio Minister tables
the report or documents in each House of the Parliament. in accordance with the
requirements of the CAC Act.
a. Where a GBE is a statutory Commonwealth authority the annual report or the fnancial
statements included therein, is prepared in accordance with guidance promulgated by
the Finance Minister. the CAC Act, the authority’s enabling legislation and any other
applicable legislation and guidance issued by the Finance Minister or portfolio.
b. Where a GBE is a company, the annual report is prepared in accordance with the CAC
Act and the Corporations Act.
(i) The annual report of a company GBE should include a statement of the main
corporate governance practices that the GBE had in place during the reporting
period, similar to that required by the Australian Stock Exchange (ASX) listing rules.
An indicative list of matters that a GBE may include when making the statement is
included at Attachment A.
Exposure Draft
c. GBEs should include comments on performance against the fnancial and non-fnancial
expectations outlined in the SCI relating to that fnancial year.
36 Australian National Audit Offce Audit Report 15 2000-2001 Agencies’ Performance Monitoring of Commonwealth Government Business Enterprises,
Recommendation No 3 (page 70) http://www.anao.gov.au/director/publications/auditreports/2000-2001.cfm?pageNumber=4
37 Refer Paragraphs 3.3.2 and 3.3.7 of this discussion paper.