Mertons’ Corporate Snapshot – September 2021
Mertons’ Corporate Snapshot provides you with an overview of current corporate governance matters, including regulatory changes, trends, and other important issues.
To discuss how these may affect you, please contact us on 03 8689 9997.
Continuous Disclosure; fault-based approach
The Australian Institute of Company Directors (AICD) has provided new advice about legislative reforms which introduce a fault element to continuous disclosure. In short, corporations and their officers will only be liable for breaches of continuous disclosure laws where material information is intentionally, recklessly or negligently shared or withheld from the market.
Legislation has been passed providing further temporary recognition of virtual AGMs and electronic signing of documentation, through to March 2022. This sits alongside ASIC’s recent extension of time for holding AGMs – details of the relevant date brackets can be found here.
Proposed Financial Accountability Regime (FAR)
Federal Treasury recently released an Exposure Draft of the FAR legislation. which will extend the Banking Executive Accountability Regime to entities under the aegis of APRA (insurers and superannuation funds). The regime will create obligations related to accountability, key personnel, deferred remuneration and notification. You can read the exposure draft and discussions here. The AICD has confirmed their support for the objectives of FAR but expressed some concerns in a submission available here.
Good News on Boardroom Diversity
The University of Queensland Business school has released the outcomes of research on board diversity amongst the ASX 200 boards. The report reveals that Australia is one of only three countries to have more than 30 per cent female representation on its top listed company boards, without legislative intervention.
ACCC Chair Flags Merger Review Crackdown
The Australian Competition and Consumer Commission (ACCC) has proposed a sweeping overhaul of Australia’s merger review regime. In the interests of protecting small businesses and consumers, chair Rod Sims has foreshadowed a move towards mandatory, and no longer voluntary, notification, and a presumption of anti-competitive harm in mergers involving companies with “substantial market power.” Mr Sims was speaking at a Law Council of Australia event in August, reported here. At this stage, no formal process has been commenced.
There’s an interesting discussion available on the AICD website about the issues surrounding vaccinating your workforce. Large companies are both mandating vaccination, and providing facilities and support for it to be done on a large scale. But legal grey areas around consent remain.
Director Identification Numbers (DINs) Are Coming
The Corporations Act (2001) has been amended to create a Director Identification Number (DIN) scheme, aimed at assisting regulators to detect and combat unlawful conduct. Applicable to all directors, including shadow and de facto directors and company secretaries, the new regime will come into effect by 1 November 2022 and will be administered by the new Australian Business Registry Services (ABRS). Civil and criminal penalties will apply for non-compliance. You can read ASIC’s overview of the DIN regime and the role of ABRS here.
Sources of information: Australian Securities and Investments Commission (ASIC); Australian Institute of Company Directors (AICD); Australian Broadcasting Corporation (ABC); Australian Competition and Consumer Commission (ACCC).
Disclaimer: Mertons Corporate Snapshot is only intended to provide a general overview on matters of interest. It is not intended to be comprehensive and is not legal advice. We attempt to ensure that content is current but we do not guarantee its currency. You should seek legal and/or professional advice before acting or relying on any content.