A number of areas were singled out for concern, as KPMG saw a significant shortfall in current corporate practices and the practices that the ASX sought to create.

The group said it suspects most companies will need to do work in the responsibilities of board and management area with a best practices expectation of directors' arguably needing to interrogate and challenge at a much more detailed level.

"Many directors are questioning at what point active oversight becomes management" KPMG said.

"One result of this recommendation could be a tighter delineation of CEO responsibilities, and, in a practical sense, possibly redefinition of CEO powers.

The criteria of independent directors was an area where boards may face difficulty, said KPMG.

"The definition of an independent director will now exclude people who have been employed as advisors to the organisation within the preceding 3 years, such as accountants, lawyers and bankers."

"Coupled this with, boards may find it difficult to find new independent directors with the appropriate skills and experience."

KPMG noted that codes of conduct were hardly new. However, it said a code that specifically applied to boards and CEOs (rather than employees in general) will break new ground for many companies.

It asked how the application of such a code was to be monitored and reported and whether it should contain provisions to cover "whistle blowing".

On the financial reporting guideline, KPMG believed the recommendation for the CEO and CFO to attest to the financial statements would not absolve directors from their existing legal responsibility for the reliability of financial reporting.

"Many companies already have some form of executive attestation on the financial statements, particularly larger listed companies, but these mechanisms will need to be reviewed to ensure they are consistent with the new principle," said KPMG.

"Fortunately, the proposed definition of financial expert used in the US Sarbanes-Oxley Act of 2002 has not been replicated here, as that definition would have certainly created greater difficulties for boards to identify audit committee candidates.

"KPMG believes that some existing audit committees will not satisfy all of these conditions, and thus will need to be reconstituted. This may prove to be a challenge when considering the potential for a shrinking pool of talent from which to draw.

It said it believed the requirement to establish written disclosure policies and procedures went beyond the existing continuous disclosure regime. It is designed to encourage a mindset of "maximum" rather than "minimum" disclosure.

"Many companies will need to develop new processes in this area, and perhaps re-evaluate the transparency and explicitness of their current reporting practices," said the firm.

KPMG said it believed the recommendation regarding shareholder rights codified existing best practice.

The risk management guideline to "recognise and manage risk" was an area of concern for boards.

"In our experience, this is often due to an absence of an effective executive risk management committee. Audit committees and the board could resolve many of their concerns about their role and responsibilities for risk, and improve the risk management of the organisation, if such executive committees existed, were held accountable and operated effectively.

"It is unclear from the recommendation, what criteria boards should use in assessing risk management controls and systems, and whether they should seek independent verification of the efficacy of such controls.

"At the very minimum, it means that boards should consider whether they have an appropriate internal audit or equivalent oversight / review function. Audit committees may need to review their relationship with the internal audit function, the scope of its activities, and the resources available to it.

Financial reporting: "The recommendation that the CEO and CFO should state in writing that the financial results are founded on a sound system of risk management and internal compliance and control and that they will also be required to state in writing that the company's risk management and internal compliance systems are operating efficiently and effectively seems to break new ground in Australia.

"In this context, how is "efficiency" to be measured, and against what benchmarks?," asked KPMG.

At present KPMG said it appeared that not all boards had a formal mechanism for evaluating board performance and/or the performance of individual directors, so they will have to determine how they will demonstrate their compliance to the Board Performance guideline.

The recommendation to remunerate fairly and responsibly added a further layer of disclosure to those already required under the Corporations Act and accounting standards. Boards will have to navigate a remuneration disclosure regime that is becoming more complex.

"With the multitude of emerging requirements in this area there is a risk that the intention of increased transparency will not be achieved and the result will be duplication and potentially inconsistent reporting in this area," it said.