AIST’s Governance Code is a principles-based framework which goes beyond current regulatory requirements, cementing a high benchmark of practice in Australia. The Code, which consists of 8 principles and 21 requirements, aims to promote continuous improvement in governance practice, improve accountability and transparency, and protect and improve outcomes for members.
As part of the implementation of the Code, AIST appointed a three-member independent Governance Code Monitoring Panel responsible for monitoring, engagement, reporting, and other Code-related activities.
The Code became mandatory for AIST member on 1 July 2018 and fiscal year 2020 was the second full year of reporting.
The Panel’s assessment of fiscal year 2020 reporting is available here. The report analyses 41 AIST member compliance reports submitted to the Governance Code Monitoring Panel. It finds that the funds have improved their level of compliance since FY19. The Panel identified five requirements where governance practice and reporting can improve the most:
- 1.4 Demonstrate a written diversity policy setting out measurable objectives with annual reporting to ensure broadest talent pool is tapped;
- 2.5 Demonstrate that the chair is appointed by the board and satisfies skill and experience profile in fund’s skills matrix;
- 2.1 Demonstrate that there is a committee responsible for board renewal with at least three members that meet at least annually; disclose the charter, members and annual attendance records;
- 2.2 Maintain a matrix showing skills, experience and diversity which acknowledges gaps the board will fill to fulfil its strategic plan; disclose a representation of the matrix;
- 1.5 Annually evaluate performance of collective board and individual trustees; disclose the process and confirm annual implementation.
The Panel’s assessment of fiscal year 2019 reporting is available here.
Fiscal year 2021 is the third year in which funds will report and there is a requirement to have their boards sign off on the reports and submit them to AIST by 30 September 2021.
The Code will be reviewed in the second half of calendar year 2021.
Governance Code resources
The Code Guidance provides legal and regulatory context and commentary on each requirement.
FAQs includes a range of information and special guidance for public sector funds.
Governance Code tools are the in process of being updated for 2020 reporting and will include revisions of the following:
2021 Governance Code Reporting Template provides a structured report designed for use by governance personnel responsible for preparing and submitting a fund’s compliance report for approval of their Board. It also assists the Panel to analyse the profit to member sector’s governance practices.
2020 Governance Code Helpful Hints for Reporting includes models for satisfactory explanations of compliance as well as leading practice examples for each of the 21 requirements.
Further information on the Code and/or reporting processes is available by contacting Holly Lindsay, AIST Senior Manager, Governance on +61 3 8677 3855 or by emailing [email protected]