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New guide to risk and compliance with ASX Principle 7


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With businesses needing to reassess how they deal with the expanded scope and depth of reporting, CFOs from Australia’s major business enterprises (G100) and professional services firm Deloitte have issued guidance on material business risk to facilitate good governance and investor confidence.

Advising specifically on compliance with the ASX Corporate Governance Council’s (CGC) Principle 7, the G100/Deloitte guide Recognise and manage risk: a Guide to compliance with ASX Principle 7(2nd edition)  is designed to support good corporate governance practices in Australia, according to G100 National President, Tony Reeves.

“Good corporate governance practices are essential for efficient capital markets, investor confidence and for advancing Australia’s financial competitiveness. Developments, both internationally and in Australia, continue to focus on these goals. The Group of 100 is committed to assisting in this reform process by developing guidance on implementing good practice,” Mr Reeves said.

“The purpose of the Guide is to provide guidance in relation to complying with ASX Principle 7. A sound and robust system of risk management and internal control, designed in the context of the nature of the company and its culture, is an integral part of a company’s ongoing management and governance processes. The Guide does not specify or adopt a particular model or approach, however the COSO model is used as the basis for discussion.”

Head of Deloitte’s Governance, Risk & Compliance practice, partner Craig Mitchell said, “The great majority of Australian corporates have financial year balance dates of 30 June. Since 1 July 2008 they have been subject to the requirements of the revised ASX Principle 7.

“Contrary to belief in some sectors of the corporate community, the revised Principle 7 includes changes which will refocus Boards and executives on their risk management process and procedures to ensure they can satisfy the requirements of the new level of reporting.

“Key in the new Principle 7 requirements is the reporting on the effectiveness of the systems and processes to manage material business risks. The expanded scope and depth of reporting that management must now make to the Board will cause many companies to reconsider and re-work how they respond to this requirement,” he said.

Copies of the G100/Deloitte guide Recognise and manage risk: a Guide to compliance with ASX Principle 7(2nd edition) can be downloaded from www.deloitte.com/au/corporate_governance and www.group100.com.au.

Tony Reeves
National President
Group of 100
Tel: +61 2 9239 6622

Michael Potter
Communication Advisor
Group of 100
Mobile: 0417 541 737
Tel: +61 3 9617 3700

Craig Mitchell
Partner
Governance, Risk & Compliance
Tel: +61 2 9322 7729

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