22 October 2018
Diversity, fair remuneration and climate change: Just Share’s response to the JSE Consultation Paper
On 19 September, the JSE published for public comment a “Consultation Paper on possible regulatory responses to recent events surrounding listed issuers and trading in their shares”.
The JSE developed the consultation paper “with the aim of obtaining public input on possible improvements to its regulatory approach to new and existing listings on the JSE”.
In its response to the Consultation Paper, Just Share welcomed the JSE’s initiative and openness to public input. The JSE is in a unique position to drive better disclosure and practice by listed companies on environmental, social and governance (ESG) issues, and in doing so to strengthen good corporate citizenship in South Africa.
Just Share expressed support for a number of the JSE’s proposed amendments, and also submitted the following:
- That remuneration policies should be publicly available.
- That in a country regularly touted as one of the most unequal in the world, listed companies have an opportunity to demonstrate leadership and contribute to the challenge of addressing inequality in South Africa, by disclosing information not only about executive remuneration but also about the remuneration of their lowest paid workers.
- That the remuneration gap between men and women should be disclosed.
- Both of the above proposals are already supported by South African business, represented by Business Unity South Africa, as agreed at the Jobs Summit in early October 2018.
- That the JSE consider escalation mechanisms for non-binding advisory votes, along the lines of the Australian “two-strikes” law. In terms of that law, if an issuer’s remuneration report receives a “no” vote of 25% or more at two consecutive AGMs, shareholders must vote at the second AGM to determine whether all directors should stand for re-election.
- That to help South African companies adequately and rapidly respond to the unprecedented challenges posed by climate change, the JSE is in a powerful position to drive the adoption of practices that can help companies to manage climate risk and build long-term resilience into the South African economy. Disclosure and board level “climate competence” are key foundations of these practices, and the JSE has an opportunity to position itself at the forefront of climate risk disclosure globally by:
- Requiring that the boards of listed companies include directors with expertise in climate change;
- Requiring that the full board undertake climate risk training;
- Publically supporting the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD); and
- Requiring companies to adopt, or at the very least recommending that they adopt, the Recommendations of the TCFD in their financial reporting.
You can see Just Share’s full submission here: Just Share NPC response to JSE Consultation Paper
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