Introduction
The world of business lives certain regulations, and in Australian and US business environments these regulations mainly concern the policies of information disclosure. In Australia, these regulations are determined by the Australian Securities Exchange (ASX), and in the United States, it is Regulation Fair Disclosure (FD) that deals with disclosure issues. The requirements both organizations present for the Australian and American companies regarding continuous disclosure display certain similarities and differences, and this paper focuses on their comparative analysis.
BHP Billiton Disclosure Policies
The continuous disclosure requirements in Australia and United States are set by reputable organizations. Australian Securities Exchange (ASX) claims to provide the continuous disclosure requirements as a guarantee that “no investor, or anyone group of investors, is disadvantaged by lack of material information when making investment decisions” (ASX, 2009).
The general requirement by ASX reflects the nature of other requirements and the need for any entity to respect the ASX standards: “Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, the entity must immediately tell ASX that information” (ASX, 2009). All other ASX requirements focus on this rule and regulate the disclosure of the business data to ASX and all market players in a certain area of business.
By the ASX requirements on continuous disclosure, BHP Billiton reports the complete commitment for information disclosure to the securities market of Australia (BHP Billiton, 2009). In its Market Disclosure and Communications Policy, BHP Billiton explicitly states that it agrees with ASX requirements and even quotes the ASX’s Listing Rule 3.1, which obliges any business entity to disclose any potentially profitable information to the market (BHP Billiton, 2009a). At the same time, BHP Billiton reserves the right not to disclose certain types of information that might include commercial secrets and incomplete or intended transactions. The BHP Billiton Disclosure Committee is charged with determining the information is subjected to disclosure or not (BHP Billiton, 2009a).
The BHP Billiton Market Disclosure and Communications Policy also states that every department of the company should have its Disclosure Officer responsible for presenting the department performance data to the Disclosure Committee. The latter has a developed Disclosure Guidance Paper aimed at explaining their disclosure rights and obligations to every single employee of BHP Billiton (BHP Billiton, 2009a). BHP Billiton adopts the policy of disclosing its information first to the exchanges where it is primarily listed, and then to the secondary listing exchanges. The Company secretary bears the responsibility of providing the disclosed data to the exchanges mentioned (BHP Billiton, 2009a).
Ford Motor Company Disclosure Policies
In the United States, Regulation FD is the standard for business entities regarding their data disclosure. Adopted by the US Securities and Exchange Commission in 2001, the FD prohibits the selective disclosure of any business information and “requires issuers to immediately or promptly publish any material nonpublic information selectively disclosed” (Steele, 2002). The violators of these regulations might face injunctions and considerable fines, but no legal responsibility is determined.
Ford Motor Company, as one of the major players of the US automobile market, also operates in the securities exchanges in the United States and abroad. Trying to conform to the Regulation FD requirements, Ford Motor Company accepts and respects the regulations on continuous disclosure and adjusts its Board’s policies to them (FTC, 2009). Similar to BHP Billiton, Ford Motor Company recognizes the right of any other market player or a company listed in a securities exchange to be aware of Ford’s developmental trends and other potentially profitable information (Ford, 2009). Accordingly, Ford Motor Company adopts the Board’s policy of complete data disclosure and publically condemns the selective disclosure practices (Ford, 2009).
However, as the American disclosure requirements differ from the Australian ones, Ford Motor Company adopts different Board’s policies on continuous disclosure (especially in respect of foreign business entities and potential consumers of Ford Motor Company products) as compared to BHP Billiton. According to FTC (2009), Ford Motor Company reserves the right provided by the Regulation FD not to reveal its information to foreign companies. Concerning its customers, Ford Motor Company adopts a far more loyal and attractive Board’s policy of disclosure of all the relevant information about its securities and products including cars, spare parts, and other Ford merchandise (Ford, 2009; FTC, 2009).
Conclusions
To conclude, in Australia and US the policies of information disclosure, regulated by Securities Exchange (ASX) and Regulation Fair Disclosure (FD) respectively, there are some similarities and differences. According to this, the Board’s policies that Australian and American companies adopt about continuous disclosure are also similar and different in some aspects. Australian companies implement Board’s policies requiring the companies to disclose all the potentially profitable information to other market or exchange players.
In the United States, the Regulation FD requirements focus on the domestic entities, while international companies have no legally protected right to inquire about the disclosure of the American companies’ information. The above-presented examples of the Board’s policies of Australian and American companies’ on continuous disclosure illustrate this argument and provide information on how Australian and US-based companies follow their local disclosure requirements in their Board’s policies.
Reference List
ASX 2009, Continuous Disclosure, Australian Securities Exchange. Web.
BHP Billiton 2009, Resourcing the Future. Web.
BHP Billiton 2009a, Market Disclosure and Communications Policy. Web.
Ford 2009, Ford Motor Company. Web.
FTC 2009, Ford Motor Company Disclosure Policy, BCP. Web.
Steele, S 2002, Timely Disclosure of Material Corporate Information, PFS Program. Web.