ASX Listed Entities
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ASX Risk Management and Internal Control Requirements
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The introduction of the ASX Corporate Governance Guidelines and recent amendments to the Corporations Act through CLERP 9 have changed the landscape within which ASX listed entities now operate.
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Every ASX listed entity must now follow the 28 recommendations contained in the ASX Corporate Governance Guidelines, or explain to their shareholders why they have not done so, under the ASX’s “if not why not” disclosure requirements.
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A key feature of this new regime is the requirement that ASX listed entities establish a sound system of risk oversight, risk management and internal control. The depth of this requirement has been explained in various ASX publications with the ASX referring to the Australian Risk Management Standard (AS/NZ 4360:2004) and the US inspired COSO publications as relevant benchmarks.
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Many investors, especially institutional investors, are now placing considerable weight on risk and internal control systems when making their investment decisions. Directors and Officers insurers are similarly focusing in on the quality of a company’s corporate governance program when setting premiums.
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Simply put, it is now a commercial imperative for ASX listed entities to establish documented internal risk and compliance programs that work and Nova Solutions™ provides that solution.
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General Law Obligations
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As an executive of a listed company, not only do you have to deal with a volume of specific laws and regulations relating to public companies, you also have to deal with a vast body of general legislation, which in Australia is growing at the astonishing rate of 10% each year.
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Occupational health & safety, workers compensation, privacy, industrial relations, environmental and consumer protection laws are just a few of the areas that are likely to impact on your business on a day-to-day basis.
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We recognise that not all ASX companies are in the Top 300. In fact the vast majority of ASX listed companies are focused on their core product or service offering and often have limited resources available to dedicate to:
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- tracking their legal obligations
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- translating them into documented policies, and then
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- effectively communicating these policies to their employees.
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It is the small and medium sized enterprises in Australia (including many ASX listed entities) that bear the brunt of costs associated with non-compliance. Fines, penalties and legal fees are just the beginning. The real costs of non-compliance are often hidden and include management downtime, business disruption, reputational damage, loss of key staff and increased insurance premiums.
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As an ASX listed company the pain is often multiplied by the fact that you are “on the stage under a spot light”. Compliance breaches often become public with resulting reputational damage having the potential to negatively affect share price and the ability to raise additional capital.
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