With the 2023-2024 financial year having come to a close, and as the AGM season approaches, listed companies are gearing up to prepare and release their Annual Reports. As a lawyer advising these companies, it’s crucial to ensure that your client’s report is not only compliant with regulatory requirements but also presents an accurate and transparent picture of the company’s governance practices and financial performance.
Including a Corporate Governance Statement in the Annual Report is a non-negotiable requirement for ASX-listed companies. This statement must outline the company’s governance framework, practices, and any deviations from the ASX Corporate Governance Principles and Recommendations. Lawyers should ensure this statement is not only comprehensive but also reflective of the company’s actual practices. This transparency fosters investor confidence and can be a differentiating factor in the competitive market.
There is no single correct method of drafting a Corporate Governance Statement, so the Practical Law team have created a standard form Corporate Governance Statement, complete with comprehensive drafting notes, to assist lawyers in preparing this essential section of the Annual Report. Lauren Singh, Senior Lawyer Writer for Practical Law, explains this further in the video above.
At the core of the Annual Report are the company’s accounts. Directors’ sign-off on the company’s accounts is not merely a formality; it’s a legal obligation that comes with significant liability. Lawyers must ensure directors fully understand their responsibilities, including confirming that the financial statements provide a true and fair view of the company’s financial position. It’s essential to review all financial disclosures, ensuring they align with the Corporations Act 2001 and relevant accounting standards. Misstatements or omissions can lead to severe penalties, both financially and reputationally.
Signing off the accounts?
The Practical Law Corporate team, together with James Lonie, Partner, K&L Gates and Catherine Lah, Senior Associate, Hogan Lovells, have prepared a handy checklist of key considerations for directors signing off the accounts.
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