On 7 September 2011, the Australian Private Equity and Venture
Capital Association (AVCAL) released a
new corporate governance code for the private equity industry.
The Code is based on existing corporate governance guidelines
already used by regulators such as the ASX, and builds on
initiatives by other national industry associations, responsible
investment advocacy groups, and public markets stakeholder groups.
The Code contains 7 principles:
Principle 1: Promote and safeguard the
interests of the fund's investors, recognising the diverse
nature of those interests.
Principle 2: Embed ethical, responsible and
rigorous decision-making by general partners and portfolio company
boards and management.
Principle 3: Promote effective portfolio
company board composition and structures.
Principle 4: Respect the interests of
stakeholders at both fund and portfolio company levels.
Principle 5: Ensure the integrity and utility
of reporting by portfolio companies to general partners, limited
partners and other stakeholders (private disclosure).
Principle 6: Be transparent in dealings with
other key stakeholders in portfolio companies (public
Principle 7: Align financial reward with
The Code provides a series of guidelines, rather than a list of
prescriptive rules. AVCAL members are obliged to adopt the
guidelines and where a member has failed to do so it is required to
explain why they have not complied (the "if not, why not"
It is hoped that the new code will increase transparency in the
private equity industry, and help to build investor and public
confidence in the way in which the industry works and the returns
Swaab Attorneys was the highest ranking law firm and the
13th best place to work in Australia in the 2010 Business Review
Weekly Best Places to Work Awards. The firm was a finalist in the
2010 BRW Client Choice Awards for client service and was named the
winner in the 2009 Australasian Legal Business Employer of Choice
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).