The ASX Corporate Governance Council was formed on

15 August 2002, bringing together 21 groups from disparate business backgrounds and carrying the varying aims and priorities that accompany those constituencies.

What is Corporate governance ?

Corporate governance is the system by which companies are directed and managed. It influences how the objectives of the company are set and achieved, how risk is monitored and assessed, and how performance is optimized.

 The purpose of ASX corporate council is to develop

recommendations which reflect international best practice. Each principle is explained in detail, with implementation guidance in the form of best practice recommendations. Aimed to provide a practical guide for listed companies, their investors, the wider market and the Australian community. The relevance and effectiveness of these guidelines will be periodically reviewed by the ASX Corporate Governance Council

 Committee proposed listing rule as per this rule ,

companies are required to provide a statement in their annual report disclosing the extent to which they have followed these best practice recommendations in the reporting period. The ASX Listing Rules mandate the establishment of audit committees by companies. Respect the rights of shareholders and facilitate the effective exercise of those rights.

 Companies are encouraged, but not required, to maintain a

company website, and to communicate with shareholders. If the company does not have a website it must make relevant information available to shareholders by other means via electronic methods.

The essential corporate governance principles according to committee

1. Lay solid foundations for management and oversight: Recognise and publish the respective roles and responsibilities of board and management. 2. Structure the board to add value: Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties. 3. Promote ethical and responsible decision-making : Actively promote ethical and responsible decisionmaking

4. Safeguard integrity in financial reporting : Have a structure to independently verify and safeguard the integrity of the companys financial reporting. 5. Make timely and balanced disclosure : Promote timely and balanced disclosure of all material matters concerning the company. 6. Respect the rights of shareholders: Respect the rights of shareholders and facilitate the effective exercise of those rights.

7. Recognise and manage risk : Establish a sound system of risk oversight and management and internal control.

8. Encourage enhanced performance : Fairly review and actively encourage enhanced board and management effectiveness. 9. Remunerate fairly and responsibly : Ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to corporate and individual performance is defined. 10. Recognize the legitimate interests of stakeholders : Recognise legal and other obligations to all legitimate stakeholders.