Principle 1: Lay solid bases for oversight and management:

The respective responsibilities and roles of a company management and board must be
disclosed and established by a company and also how their actions and performance is
evaluated and monitored. The main aim of this code is to place the strong bases for oversight
and management. Moreover, it states that the respective responsibilities and roles of a
company management and board should be disclosed and established by a listed entity and
also how their actions and performance is evaluated and monitored. It should be noted that
discovery of how performance of company’s management and board is assess by a company
has been introduced newly in the 3rd edition. Additionally there is other as well. Further
“check and balances” of election of director is provided in recommendation 1.2. It said that a
company should:
 Offer security holders with the material knowledge under his control related to the
decision on either a director should be elected or re-elected or not.
 Under proper checks before hiring an individual, or putting onwards an applicant for
election to the security holders, as a director.

Principle 2: Add value and construct board to be operative

The main aim of this second code is to construct the board in order to enhance value. A
company is required by this to have concern to the skills of its board and also its
commitment, composition and its size to allow it to effectively discharge its responsibilities.
It must be keep into consideration that “skills” is included here newly. Also there are several
additional suggestions. It combines Recommendation 2.1, which proposes that the governing
body of the company has a “destination board” that:

 Has the committee members

 the committee charter
 is disclosed and chaired by independent director
 has three members at least, and in which majority are independent directors
 as at the each reporting period’s end, the member’s individual attendances and
throughout the period the number of times committee met at those meetings.

Principle 3: Acting responsibly, ethically, and lawfully instill the culture

A listed entity is required by this principle to act responsibly and ethically. From year 2010
amended version it differs perceptibly, which states that responsible and ethical decision-
making should be actively promoted by the companies. Just one recommendation is included
in third edition that is 3.1. It states that company should:
 disclose the rule and its summary
 have a principle for its employees, senior executives, and directors

The year 2010 changed version, in contrast set up its entailment also, namely:
 the accountability and responsibility of individuals for investigating and reporting
unethical practices’ reports
 the practices required to consider the rational prospects of their stakeholders and their
legal obligations
 The practices needed to maintain the confidence in integrity of the company
Moreover, it is worth focusing that third principle does not refer to the gender diversity issue.
But this issue has been shifted to the first principle.
Principle 4: Protect the corporate reports’ integrity:
The main aim of this principle is to protect the company reporting’s integrity. In contrast this
sits to the version of year 2010 that referred to protecting financial reporting integrity.
However, in addition to this, the presentation of new proposals is not much different from its
background. Proposition 4.2 is complementary in this rule: Before a listed entity approves the
financial statement of the entity for the financial period, the listed entity’s boards should
receive a declaration from its CFO or CEO that, in their perspective, financial statements
fulfill the proper accounting standards and the entity’s financial record has been maintained
properly, and offer a reasonable and reliable view of the execution and situation of the listed
entity’s financial place, and this opinion was made on the basis of a firm agreement on
internal control and also risk management who work in a viable manner. In addition,
Proposition 4.3 is new. In addition, it states that the entity indicated in the AGM must make
sure that external auditors have gone to AGM, and in addition, it is open to answer the
security owner’s requests identified during the audit. It highlights the apparent significance of
active dialogue among the firm, its stakeholders and the external auditors if maintenance of
“three lines of defence” is required.

Principle 5: Create balanced and timely disclosure:

Listed entities are required by this principle to create balanced and timely disclosure. It states
in the amendment of year 2010 that all material issues concerning the firm must promote
balanced and timely disclosure by the companies. In the version of year 2014, the material
word has been omitted. Or it reads that an organization included in the list should carefully
and favorably disclose all issues that a reasonable person can have a significant impact on the
value or cost of their protection.
Because of this, principle would remain updated given that organizations must act in an
intentional sense by common audience. This gives organizations more guidance on what
material should be disclosed. The fifth rule has only one suggestion, in particular, that the
listed entity must:

• identify that rule and its summary; and

• have a strict agreement to meet its ongoing exposure requirements in accordance with
publication guidelines
As compared to the amended version of year 2010 this is more brief that places focuses on
the senior executives’ responsibility by stating: Written policies must be established by the
companies designed to guarantee the fulfillment with disclosure requirements of Listing rules
of ASX and also to guarantee the responsibility at company’s senior executive level for
fulfillment of policies and also disclose rules or those policies’ summary.

Principle 6: Respect the security holders’ rights:

The main aim of this principle is “to respect the security holders’ rights”. It contrasts with the
actual version that refers to the stakeholders. The version of year 2014, in addition,
incorporates considerable details on how such respect might be demonstrated by an entity,
offering a recommendation list to ensure proper disclosure and communication of
information. It incorporates making communications’ available electronic means. The sixth
principles states that: The security holder’s rights must be respected by a listed entity by
offering them with proper facilities and information to enable them to practice effectively
those rights.
  Recommendation 6.1: through website, information must be provided by a listed
entity about itself and also about its management to investors
 Recommendation 6.2: an investor associations programs must be implemented an
designed by a listed entity to facilitate two-way effective communication with its
investors
 Recommendation 6.3: Processes and policies must be disclosed by a listed entity in
place to encourage and facilitate attendants at security holder’s meetings
 Recommendation 6.4: The choice to send communication to, and receive
communication from, security registry and the entity electronically must be given to
security holders by a listed entity

Principle 7: Manage and recognise risk:

The main aim of this principle is to manage and recognize risk and also requirement details
for a stable risk management structure that incorporates reviewing the effectiveness of the
framework. Interestingly, in previous versions, the third version differs in the number of its
proposals and can be considered as the most significant change in the 2014 corporate
governance standards. Proposal 7.1 establishes the need for the main board of the
organization to have a separate board of trustees or various advisory groups. It is even more
specifically stated that the board of the listed entity must:

 Disclose the procedures and the reality it uses to deal with the risk management
structure of the company, if it does not have an advisory group for risk administration
that managers have previously encountered; or
 Have committee in order to manage the risk, which has:
o Has the committee members
o the committee charter
o is disclosed and chaired by independent director
o has three members at least, and in which majority are independent directors
o as at the each reporting period’s end, the member’s individual attendances and
throughout the period the number of times committee met at those meetings.
Recommendation 7.2 emphasize upon the risk management framework of a company. It
states that committee of board or board itself must:
o disclose with respect to all reporting periods, either that type of review has conducted
or not;
o review the risk management framework of the entity annually at least to satisfy that it
pursuit to be sound.

Principle 8: Remunerate responsibly and fairly:

Although the agreement and the level of compensation are reasonable and adequate, and that
its relationship with the impact is straightforward and clear, as shown by the 2010
amendment, it says that the company director should receive adequate compensation from the
organization to maintain and attracting highly qualified managers and, in addition, planning
the remuneration of officials to stimulate, retain and attract highly qualified administrators
and to collect their interests with a view to validity for holders of securities.
The listed entity’s board, according to the recommendation 8.1 must:

 Disclose the processes and fact it employs for setting the composition and level of
remunerations for senior executives and directors and moreover ensuring that this
type of remuneration is not excessive and appropriate; and
 Have committee in order to manage the remuneration, which has:
o Has the committee members
o the committee charter
o is disclosed and chaired by independent director
o has three members at least, and in which majority are independent directors
o as at the each reporting period’s end, the member’s individual attendances and
throughout the period the number of times committee met at those meetings.
Recommendation 8.2 states that a listed entity should disclose separately its practices and
policies regarding the non-executive directors’ remuneration and executive directors and
senior executives’ directors’ remuneration.

Recommendation 8.3 states that listed entity that has remuneration based on equity must:

 disclose that rule or its summary

 have a rule on whether members are allowed to enter into the transactions that restrict
the participating in schemes’ economic risk.