Mandatory rotation of auditors is now at the top of the Public Investment Corporation’s hit list of corporate governance issues.
Ann Crotty writes that the Public Investment Corporation (PIC), the largest investor on the JSE, has strongly endorsed the push for mandatory rotation of audit firms by voting against the reappointment of audit firms at JSE-listed companies where there has been a 10-year plus relationship.
The PIC’s voting results for annual general meetings (AGMs) held during the December quarter show it voted against the reappointment of auditors at 14 of the 40 AGMs it attended.
This means mandatory rotation of auditors is now at the top of the PIC’s hit list of corporate governance issues, along with independence of directors and flawed remuneration policies.
Resolutions to reappoint auditors at Distell, Impala Platinum, Group Five, Imperial Holdings, Northam Platinum, Clover, MMI Holdings, Harmony, Kap International, Woolworths, African Rainbow, Aspen Pharmaceutical, Blue Label and Spur all received a thumbs down from the PIC.
Unfortunately, in no instance did the PIC’s vote result in an audit firm not being reappointed.
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