Review of Commonwealth Government Business Enterprises ...

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40 Table of Contents Part 1 - Overview 41 Defnition 41 Application 41 Principles 41 Mandate and Objectives 42 Part 2 - Board and Corporate Governance 44 Board Responsibility and Conduct 44 Board Appointments and Performance 45 Part 3 – Planning and Reporting 48 Requirements 48 Corporate Plans 50 Statements of Corporate Intent 52 Progress Reports 52 Annual Reports 53 Keeping Shareholder Ministers Informed 54 Part 4 - Financial Governance 56 Capital Structure and Dividend Policy 56 Financial Targets for GBEs 57 Managing Risks 58 GBE Borrowings 58 Part 5 - Other Governance Matters 59 Workplace Relations 59 Superannuation 59 Partly Owned GBEs 59 Partly Owned Subsidiaries of GBEs and Joint Ventures involving GBEs 60 Exposure Draft Arrangements for GBEs Being Established, Sold, Restructured or Wound Up 61
Part 1 - Overview Defnition 1.1 A Government Business Enterprise (GBE) is a Commonwealth authority or Commonwealth company as defned by the Commonwealth Authorities and Companies Act 1997 (CAC Act) and prescribed as a GBE under the Commonwealth Authorities and Companies Regulations 1997. Application 1.2 The Commonwealth Government Business Enterprise Governance and Oversight Guidelines (the GBE Guidelines) apply to GBEs that are Commonwealth authorities (authority GBEs) and GBEs that are wholly-owned Commonwealth companies (whollyowned company GBEs). 1 a. When forming subsidiaries or entering into joint ventures, GBE Directors should ensure that there are no provisions in the company constitution or any shareholders agreement of the subsidiary which prevent the GBE from complying with the GBE Guidelines. 1.3 For GBEs that are Commonwealth companies and are not wholly-owned Commonwealth companies, the extent to which these GBE Guidelines apply will be identifed in legislation applying specifcally to the GBE, the company constitution or shareholders’ agreement (see paragraphs 5.3 to 5.12 of these guidelines for more detail). 1.4 These GBE Guidelines should be read in conjunction with the CAC Act (http://www.fnance.gov.au/fnancial-reporting-and-accounting-policy/index.html). Principles 1.5 The main features of the Commonwealth’s relationship with its GBEs are: a. a strong interest in the performance and fnancial returns of the GBE; b. reporting and accountability arrangements that facilitate best practice governance and active oversight by the Commonwealth; and c. action by the Commonwealth in relation to the strategic direction of its GBEs where it prefers a different direction from the one proposed. 1.6 The Commonwealth’s ownership interest is generally represented by two `Shareholder Ministers´. The Shareholder Ministers are the Responsible Minister (that is the Minister responsible for the GBE) and the Finance Minister 2 . The Finance Minister is generally the sole Shareholder Minister for those GBEs within the Finance portfolio. Exposure Draft 1 That is, where the Commonwealth has a 100 per cent ownership interest in the company. 2 Under section 5 of the CAC Act, the Finance Minister is the Minister who administers the CAC Act. 41
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 and 38: 4.3 Managing Risks 4.3.1 The govern
Page 39 and 40: Part 5 - Other Governance Matters 5
Page 41: Appendix A: Commonwealth Government
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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