2020 Vision - What Governance professionals can expect in 2020
As we approach 2020, we set out what governance professionals can expect as the new year unfolds.
Whistleblowing gets real
Public companies, large proprietary companies and proprietary companies that are trustees of registrable superannuation entities are required to have a whistleblower policy and make it available to their officers and employees by 1 January 2020. Failure to do so is a strict liability offence with a penalty of $12,600. ASIC has released Regulatory Guide 270: on establishing, implementing and maintaining a whistleblower policy that complies with the obligations under the Act.
ASIC has granted relief to small NFPs from the requirement to have a whistleblower policy.
Modern Slavery statements
Entities caught by the reporting provisions of the Commonwealth Modern Slavery Act 2018 need to begin reporting on their first full reporting period after 1 January 2019. Companies with a financial year ending 30 June will need to report by no later than 31 December 2020.
The 4th edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations.
The fourth edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations takes effect for an entity’s first full financial year commencing on or after 1 January 2020. Entities with a 30 June balance date will be expected to measure their governance practices against the fourth edition recommendations commencing with the financial year ended 30 June 2021.
Regulators team up
APRA and ASIC have signed a Memorandum of Understanding to support planned legislation to create a statutory obligation on ASIC and APRA to cooperate, share information and notify each other of suspected breaches of laws administered by the other.
BEAR becomes FEAR
Government will continue to roll out legislation implementing the recommendations of the Hayne Royal Commission in accordance with its implementation roadmap. This will include extending the existing Banking Executive Accountability Regime (BEAR) to all APRA-regulated entities, including insurers and superannuation funds (FEAR). The Government will also extend the accountability regime to a broader range of conduct and non-prudentially regulated entities to be administered by ASIC.
Board oversight of remuneration
ASIC is expected to issue the next report from its Corporate Governance Taskforce on director and officer oversight of discretionary decision making in variable executive remuneration early 2020. Expect ASIC to increase its focus on the role of the remuneration committee.
APRA gears up
As part of its strengthening of the prudential framework, APRA is expected to respond to feedback on its proposed Prudential Standard CPS 511 Remuneration in 2020. See our submission on the proposed draft here.
APRA is adopting an intensified approach to the supervision of governance, culture, remuneration and accountability.
It will be undertaking targeted prudential engagements and onsite reviews and requiring regulated entities to conduct self assessments of their governance and accountability frameworks and practices. The results of APRA’s reviews of these self-assessments will increasingly be made public.