The role of ASIC in corporate governance
An address by Berna Collier, Commissioner, ASIC, to the Corporate Governance Summit 2002, 27 November 2002.
What is corporate governance? (And a few observations on areas for reform)
Before I talk about ASIC's role in corporate governance, I think I should first define what we mean by corporate governance.
At the moment, rarely a day goes by without extensive media discussion of 'corporate governance'. You have all devoted two days of your lives to talk about, and listen to others talk about, corporate governance. Yet the term 'corporate governance' is seldom described or explained. Moreover, it often seems that different commentators include different topics in the great 'corporate governance' debate.
As many of you would know there are a large number of codes or guides describing best corporate governance practice. Many of these codes or guides have their own definitions of corporate governance. An analysis of these definitions shows that there is a reasonable consensus that, at a minimum, corporate governance is broadly about two things:
•firstly, it is about the mechanisms by which corporations are directed and controlled
• secondly, it is about the mechanisms by which those who direct and control the corporation are monitored and supervised. That is, it is about mechanisms that ensure those who are in control are accountable.
Of course, some definitions go further and refer to balancing the interests of different stakeholders in the corporation. They refer to the need to balance and align the interests of employees, creditors, suppliers, customers, and the local community, as well as the relationship between management, the board and shareholders.