Posted: 01 Nov. 2019 05 min. read

ASIC’s corporate governance taskforce

How are you overseeing non-financial risk?

Late in 2018, ASIC contacted Deloitte’s Corporate Governance Team. As part of the mission of ASIC’s newly formed Corporate Governance Taskforce, ASIC planned to spend much of 2019 reviewing the governance at large listed companies. Following numerous failings in the oversight of conduct, compliance and other non-financial risks, ASIC turned its focus to how Boards and senior executives oversee non-financial risk. 

On 2 October 2019, ASIC released its Report.  

While ASIC’s initial focus is on seven organisations from the financial services sector, its focus on governance practices will not stop there. As Australia’s corporate regulator, the duties of company directors set out in the Corporations Legislation apply broadly. ASX listed entities in every sector – in fact, Boards generally - should be asking themselves: ‘Would we be ready for an ASIC Taskforce review?’

Now is the right time for organisations to run a thorough health check over their governance and conduct governance arrangements, which should start with the Board reflecting on what good conduct really means for their organisation when it comes to purpose, strategy, and risk.

The areas that need to be the subject of critical review in light of the Taskforce Report include:

  • The relationship between statutory director and officer duties, corporate conduct, and conduct risk. How are duties discharged in director and officer oversight and management of conduct risk to achieve good conduct outcomes for the organisation?
  • The governance structures in place that support and facilitate conduct risk oversight. Who is accountable, and who determines the extent to which that accountability is satisfied? 
  • Decision-making processes. How do these processes support adherence to strategic and other objectives and account for conduct aims and risks? What management information supports sound decision-making?
  • Executive variable remuneration structures. How does the remuneration structure respond to conduct risk management responsibilities and responsibility failures? 
  • Routine conduct risk management within the organisation. Is it both systematic and influential? Does it provide reasonable assurance on conduct? Are there clear pathways that ensure conduct risk management issues are appropriately escalated and resolved?

Deloitte’s involvement in the Taskforce review 

While we did not conduct the review itself, Deloitte was commissioned to support ASIC’s work in two ways:

  • By providing a  methodology that ASIC could adapt to review the corporate governance practices of ASX listed entities, particularly in relation to non-financial risk, and
  • Conducting international research on governance practices relating to director and officer oversight of non-financial risk in the United Kingdom, the United States, Canada and Germany. 

For more details, please contact

Deb Latimer – Partner, Governance, Regulatory and Conduct Solutions  

Karen Den-Toll – Partner, Governance, Regulatory and Conduct Solutions

Mike Ritchie – Partner, Risk Advisory

Meet our authors

Karen Den-Toll

Karen Den-Toll

Partner, Audit & Assurance

Karen is a partner in Deloitte’s Sydney office in the Governance, Regulation and Conduct practice. She has over 20 years’ experience in the financial services industry and has a breadth of experience including corporate governance, crisis management and dispute resolution. Karen is the primary author and co-editor of the CCH text “The Essential Guide to Financial Services Reform”, and the Australian Bankers’ Association’s Discussion Paper on Customer Advocates. Karen focuses on the prevention and resolution of issues arising from conduct, and addressing reputation risks arising from conduct issues, as well as customer advocacy.