find the latest legal job
Senior Associate - Litigation & Dispute Resolution
Category: Litigation and Dispute Resolution | Location: Melbourne CBD & Inner Suburbs Melbourne VIC
· Come work for a firm ranked in Lawyers Weekly Top 25 Attraction Firms
View details
Associate - Workplace Relations & Safety
Category: Industrial Relations and Employment Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Employer of choice · Strong team culture
View details
Freelance Lawyers
Category: Banking and Finance Law | Location: All Perth WA
· Freelance opportunities through Vario from Pinsent Masons
View details
Freelance Lawyers
Category: Other | Location: All Adelaide SA
· • Qualified lawyer with a strong academic background
View details
Freelance Lawyers
Category: Other | Location: All Melbourne VIC
· • Qualified lawyer with a strong academic background
View details
It’s not just about the money

It’s not just about the money

An Allens partner has defended the integrity of board directors after a survey found nearly three quarters of respondents want to abolish a law that puts directors’ pay under the microscope.

On Tuesday (8 August) Allens released a client survey that included over 100 listed companies. The survey sought the views of board directors ahead of a wide-reaching review of annual general meetings (AGMs) that is expected to be released later this year by the Corporations and Markets Advisory Committee (CAMAC).

Seventy per cent of respondents either strongly agreed or agreed with the proposition that the “two strikes rule” should be abolished.

Last year, the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 included the “two-strikes” rule. This means if 25 per cent or more of shareholders reject two consecutive remuneration reports, a spill motion to dump the existing board is put to shareholders. If that is passed, the company has 90 days to hold a full-board election.

Despite the high proportion of respondents calling for the law to be abolished, Allens partner and securities law specialist Greg Bosmans (pictured) does not believe self-interest is the primary concern of dissenting directors.

“I don’t think respondents are trying to protect their own position,” said Bosmans when talking to Lawyers Weekly. “They are saying they are happy to be accountable but this mechanism is not the best way to achieve that, it is actually open for abuse for other purposes.”

A study by the Australian Council of Super Investors in 2009 found that for the 2008 financial year, the average salary of a non-executive director was $183,503 while the average salary for a non-executive chairperson was just under $440,000.

Bosmans said that board directors are aware of the level of public interest and sometimes anger directed towards hefty remuneration figures received by directors and CEOs at often underperforming companies.

Law firms differ on the vexed question of whether their personnel can sit on the boards of listed companies. While some firms ban partners from taking board positions, a number of partners at leading firms in Australia sit on the boards of high-profile companies.

Philippa Stone, the co-head of the equity capital markets team at Freehills, is a non-executive director of David Jones.

Anything KWM can do, we can do better
The Allens survey follows a report released by King & Wood Mallesons (KWM) in February this year. The Directions 2012 report featured the responses of directors from more than 300 companies on a range of issues, including gender diversity, board remuneration and regulation.

While Bosmans said that Allens “always takes note of what its rivals do”, he said his firm’s canvassing of the directors of client companies was more of a nod to the upcoming CAMAC report than trying to match KWM. “With the CAMAC review we saw an opportunity and thought this is a good idea to get out there and get some views from clients and to help inform CAMAC [with its review].”

The Allens survey was much more narrow than that of KWM, focusing almost exclusively on AGMs.

Its survey found that 72 per cent of respondents thought the AGM is in need of significant reform, with 40 per cent of respondents supporting the abolition of the AGM. Nearly half of all respondents (47%) wanted to keep it.

“I knew there was dissatisfaction out there, but I didn’t have a real appreciation there was that depth of feeling,” said Bosmans. “Those people felt that something needed to be done.”

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

It’s not just about the money
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Jetski
Oct 23 2017
How to fail well
The legal profession is due for an attitude adjustment when it comes to perceived failures, accordin...
Consultation
Oct 23 2017
Lawyers slam rushed consultation for SA repeat offenders bill
The Law Society of South Australia has expressed concern for a proposal to roll out new laws amendin...
IBA
Oct 23 2017
The pursuit of happiness in the law
A panel of legal experts have explored how to define success in the legal profession, and how lawyer...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...