23 Jul DISCLOSURE: WHY IT PAYS TO BE OPEN AND TRANSPARENT; SLAVERY REPORTING
Welcome to this week’s business and media intelligence update.
DISCLOSURE: WHY IT PAYS TO BE OPEN AND TRANSPARENT – AND WELL PREPARED
In the disclosure frame this week is Rick Lee, the Chairman of Oil Search (cap: $8 Billion), who faced investors and media on Monday to announce the unexpected departure of the CEO due, it seems, to both “ill health” and “behaviour issues”.
During the call, Lee, unprompted, told the market that Oil Search had not received any approaches from prospective suitors. Less than 24 hours later, Oil Search had to make a public “clarification” via the ASX after its larger rival, Santos, released documents showing that it had in fact, made an offer on June 25.
The reaction from investors and media was as predictable as it was unforgiving, with one prominent columnist opining that the chairman’s “clumsy handling of both its CEO’s untimely exit and the responsibility to keep the market informed has sullied the company’s reputation”. Another columnist predicted that Lee was now “toast”.
Now, hindsight is a beautiful thing, but there are a couple of lessons here: firstly, always be open and transparent; and secondly, directors, their CEOs and other senior executives need to be well prepared before fronting up to investors or media. There is just too much at stake.
SLAVERY REPORTING: BIG COMPANIES TALKING THE TALK, BUT NOT WALKING THE WALK
A new report by the Australian Council of Superannuation Investors (ACSI), has found that a third of the top 200 ASX companies are not complying with Modern Slavery Act (2018) requirements.
The majority of the 151 companies surveyed disclosed the bare minimum, with around 33 per cent of companies’ statements deemed to be “potentially non-compliant”.
Modern slavery is a crime, and the Act requires companies with revenue greater than $100 million to publicly disclose any risk of exposure to work exploitation such as child labour in their supply chains. Companies that fail to accurately identify and report these risks can face serious financial and reputational consequences.
Read the ACSI full report here.
POD ALERT – WHAT ARE INVESTORS EXPECTING THIS REPORTING SEASON?
There’s a sense of Groundhog Day as we approach this reporting season, with more lockdowns and restrictions imposed across much of Australia. So, what are investors expecting from company results? Corporate supply chains and cost inflation are two key areas of focus according to analysts and investors.
Cannings Director Susie Reinhardt sits down with Conor O’Prey, from Canaccord Genuity, and Alex Clarke, from Ellerston Capital, On The Couch, to discuss key focus areas in results, their one piece of advice to companies preparing results, and what they expect companies to do about their guidance statements.
Listen to more of their advice for companies on our latest podcast, available on:
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