Review of Commonwealth Government Business Enterprises ...

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36 Proposed Change: Corporate Plans 2.1 (d)(iv) 3.3a To supplement the information required to be provided in GBE corporate plans under the CAC Act and the Corporations Act, the plans should include details of the following matters (so far as they are applicable): vi. a summary of the GBE’s risk management policies, material risks and strategies for managing these risks. This is in addition to the requirements set out in paragraph 4.15 (refer guidance in Part 4 Financial Guidance). 3.10d. commentary on any emerging issues and risks or changes to risk factors that might have a material impact on performance. Details of strategies for managing any material risks that were not identifed in the corporate plan should also be provided. This is in addition to the requirements set out in paragraph 4.15. Managing Risks 4.9 4.14 Directors GBE boards are responsible for managing risks. Directors Boards should therefore establish processes and practices within the GBE to manage all risks associated with the GBE´s operations. 4.10 4.15 Directors GBE boards should keep the Shareholder Minister(s) informed of risk management strategies by outlining them in corporate plans and progress reports, and other reports when necessary as outlined in paragraph 3.3 above. In addition, and unless otherwise qualifed because of circumstances applying to a particular Board GBE, corporate plans and progress reports should contain a statement that the board has appropriate risk management policies and practices in place and that adequate systems and expertise are being applied to achieve compliance with those policies and procedures. 4.11 4.16 The Government Commonwealth, as a shareholder, is sensitive to commercial risk. In some circumstances, it may therefore choose to set limits on the activities of particular GBEs; for example on liabilities, fnancial exposures, use of derivative instruments, etc. a. In normal circumstances, a GBE should only use derivative fnancial instruments for the purpose of hedging exposures. 4.11 b Shareholder ministers may require the Board of a GBE to provide a risk management plan, the contents to be agreed on a case-by-case basis. 4.18 GBE boards are expected to engage in normal tax planning activities that are within the spirit of the law. It is not appropriate for GBEs to lead the market in aggressive tax planning strategies. 4.23 4.21 GBEs will usually borrow from fnancial markets. Borrowing from the Commonwealth Budget requires the specifc approval of the Finance Minister. GBE boards should be aware that some lenders will want to include in their loan documentation the right to call up their loan(s) if the control of the GBE changes. The Shareholder Minster(s) prefer(s) that GBE boards do not agree to such clauses being included in loan documentation or to any other clauses that would be triggered, at the lender’s discretion, by an ownership change. Exposure Draft
Part 5 - Other Governance Matters 5.1.1 As has been touched on above in relation to the introduction of the CAC Act and to changes to the Corporations Act (Part 3 above), there have been a number of changes in legislation since the current GBE Guidelines were introduced in 1997. The following sections have been updated to refect changes and amendments to employment legislation and to ensure consistency across the documentation. 5.1.2 The setting of remuneration for CEOs is a matter for the board to determine in consultation with the Remuneration Tribunal. However, in order to maintain maximum transparency and accountability around the establishment and maintenance of appropriate remuneration levels for CEOs, GBEs may wish to advise the Shareholder Minister(s) of updates to the arrangements agreed between the board and the CEO. Proposed Change: 5.1 Subject to these Guidelines, GBEs are free to manage relations with their employees consistent with the Fair Work Act 2009 Workplace Relations Act 1996 and in accordance with the following: a. The Board of each GBE is required to consult with the Remuneration Tribunal in determining remuneration packages for Chief Executive Offcers. The CEOs of GBEs are, with limited exceptions, covered by the Tribunal’s Principal Executive Offce (PEO) Classifcation Structure. As such, the Board, where it is the employing body, may determine remuneration for the offce, consistent with the PEO framework set by the Tribunal. The Tribunal may seek the views of the Shareholder Minister(s) prior to agreeing to any new or changed arrangements to these packages. b. The Remuneration Tribunal determines the remuneration for the directors GBE directors that is compatible with their roles and responsibilities, and having regard to, amongst other things, rates paid by the private sector federal public offces and internal relativities. c. GBEs are encouraged to apply the government’s workplace relations policy, currently the Australian Government Employment Bargaining Framework. c. d. Any matters specifed from time-to-time by the Minister for Industrial Relations responsible for workplace relations policy, after consultation with the Prime Minister and the Finance Minister. Exposure Draft 37
Page 1 and 2: Australian Government Department of
Page 3 and 4: Contents Introduction 2 Part 1 - Ov
Page 5 and 6: The key topics identifed for discus
Page 7 and 8: Part 1 - Overview 1.1 Mandate and O
Page 9 and 10: Proposed Change: (New) 3.3 2.3 a. A
Page 11 and 12: 2.3.4 These changes aim to make GBE
Page 13 and 14: . The Chair shall write to the Shar
Page 15 and 16: 2.5.4 A similar principle operates
Page 17 and 18: 2.6.4 These issues have also previo
Page 19 and 20: Part 3 - Planning and Reporting (Pr
Page 21 and 22: Table 2: Best Practice Timetable fo
Page 23 and 24: Proposed Change: (Replaces entire 2
Page 25 and 26: 3.3 Statement of Corporate Intent (
Page 27 and 28: 3.4.7 The focus on comparing budget
Page 29 and 30: 2.11b(i) 3.14 The current disclosur
Page 31 and 32: Proposed change: (New) 3.21 Proposa
Page 33 and 34: Part 4 - Financial Governance 4.1 C
Page 35 and 36: 4.2A Weighted Average Cost of Capit
Page 37: 4.3 Managing Risks 4.3.1 The govern
Page 41 and 42: Appendix A: Commonwealth Government
Page 43 and 44: Part 1 - Overview Defnition 1.1 A G
Page 45 and 46: 1.9 In addition to setting a princi
Page 47 and 48: 2.6 The code of conduct may cover t
Page 49 and 50: 2.17 On an annual basis the GBE boa
Page 51 and 52: Table 2: Best Practice Timetable fo
Page 53 and 54: Measure Key Performance indicator F
Page 55 and 56: d. commentary on any emerging issue
Page 57 and 58: 3.23 GBEs should allow a reasonable
Page 59 and 60: Financial Targets for GBEs 4.7 All
Page 61 and 62: Part 5 - Other Governance Matters W
Page 63: 5.10 The above requirements relatin
Page 66 and 67: Governance Arrangements for Commonw
Page 68 and 69: Principles Part 1 - Overview 1.1 Th
Page 70 and 71: (c) earn at least a commercial rate
Page 72 and 73: (e) The plan also covers any other
Page 74 and 75: Keeping Shareholder Ministers Infor
Page 76 and 77: Part 4 - Financial Governance Capit
Page 78 and 79: shareholder would expect the adopti
Page 80 and 81: Partly Owned GBEs, Partly Owned Sub
Page 82 and 83: Attachment A Matters for Inclusion

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