Senator SHERRY (Tasmania—Minister Assisting on Deregulation and Public Sector Superannuation, Minister for Small Business and Minister Assisting the Minister for Tourism) (14:35): Thank you to Senator Moore for her question, one that is obviously very relevant. There has been a good deal of media coverage in the last few weeks. It is what is known as the AGM season, so we have seen a number of instances of the issue of executive pay and concerns around executive pay being raised at AGMs. I would emphasise there is absolutely no problem with, in successful businesses, effective executives receiving increased remuneration. Notwithstanding that, faith does need to be kept between executives and their shareholders. We must have strong rules of accountability. Further, keeping faith between businesses, particularly large businesses, and the general public is also important in the context of this debate. Earlier this year, the government introduced significant reforms in relation to— Honourable senators interjecting— Senator Moore: On a point of order, Mr President: I cannot hear any of this answer. The PRESIDENT: I remind senators that conversation across the chamber is disorderly. I was about to pull them up but they ceased. Senator Sherry is entitled to be heard in silence. Senator Sherry, continue your answer. Senator SHERRY: Earlier this year the government introduced significant reforms in relation to executive remuneration that we argue and believe reflect this need for balance. The reforms were first and foremost about giving more power to shareholders. We should not forget that it is shareholders who ultimately pay the wages of executives. Shareholders take on the risks of investing capital in the company, so it is only appropriate that executives are accountable to those shareholders. We should not forget that other employees have to go through transparent and to some degree regulated processes when they seek pay rises, and executives should be no different. There are some key elements of the reforms. There is a two-strikes process. Under the new two-strikes rule, if a company remuneration report has received a 'no' vote of 25 per cent or more in two consecutive annual general meetings, shareholders will have the opportunity to vote on a motion to spill the board. Where a spill motion has been supported by a majority of shareholders— (Time expired)