Review of Commonwealth Government Business Enterprises ...

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Proposed change: (replaces 2.17, 2.18 and 2.10 entirely)
2.17 and 2.19 3.19 The directors of a Commonwealth authority GBE or a wholly owned
Commonwealth company GBE are required to keep the Shareholder Minister(s) informed of
the operations of the GBE and its subsidiaries and should follow a disclosure principle which is
similar to the continuous disclosure requirements of the Australian Stock Exchange listing rules.
a. Should a GBE become aware of any information that may have a material effect on
its value and/or performance 39 , that information must be immediately provided to the
Shareholder Minister(s).
b. Directors are required to give the Shareholder Minister(s) such other information in
relation to the GBE’s operations as the Shareholder Minister(s) require(s), within the
time limits set by the Minister(s).
c. Where there are two Shareholder Minister(s), all correspondence and reports from GBEs
should be sent to both Ministers simultaneously. Whilst the Shareholder Minister(s)
will consult in relation to all correspondence, they may decide that, in relation to some
matters, one of the Ministers will correspond on behalf of both Ministers.
d. The Shareholder Minister(s) may consult with the Prime Minister and/or Treasurer
about any material matter (as defned above) affecting the value of the GBE, and
provide copies of corporate plans, progress reports and correspondence on other
major matters to the Prime Minister and/or the Treasurer for possible comment.
3.20 Additional notifcation requirements are contained in the CAC Act for both GBEs that are
Commonwealth authorities, and for GBEs that are Commonwealth companies.
3.6.5 Signifcant business opportunities and other matters arising outside the corporate planning
and approval process require separate consideration by the Shareholder Minister(s). As
these matters may include changes to the strategic direction agreed in the corporate
planning process, GBEs will need to prepare a separate proposal for Shareholder Ministerial
consideration prior to entering into new agreements or altering agreed strategic direction.
3.6.6 Finance is proposing that GBEs be required to prepare and submit a business case to the
Shareholder Minister(s) outlining the background and rationale for each proposal.
3.6.7 To facilitate prompt consideration of business cases by the Shareholder Minister(s), GBEs
are to provide the necessary information in a comprehensive and timely manner. The
proposal is to contain information outlined in the appropriate CAC Act sections for both
GBE authorities and for GBE companies. The Victorian government’s guidelines set out
similar requirements to those outlined in the CAC Act. 40
3.6.8 In addition, Finance considers that some indication be provided to GBEs to assist in
determining when to advise the Shareholder Minister(s) of information that may impact
GBE performance and results. Finance considers that the provision of a threshold
percentage of the GBE’s shareholder value will be of assistance to GBEs in determining
the materiality of information to be provided.
3.6.9 Finance also considers that the provision of an appropriate threshold value will assist
GBEs in determining the threshold value for notifcation of business cases. The threshold
dollar value for consultation is to be agreed between the GBE board and the Shareholder
Minister(s) as part of the annual planning process.
Exposure Draft
39 Finance considers 5% of the GBE’s commercial value is an appropriate threshold.
40 Victorian Government, ‘Corporate Planning & Performance Reporting Requirements’ for Government Business Enterprises October 2009, page 8;
http://www.dtf.vic.gov.au/CA25713E0002EF43/pages/publications-regulation-guidelines#corporateplanningrequirements