Whistleblower update from Michelle Huckel, Policy Adviser, Governance Institute of Australia
Under recent amendments to the Corporations Act, 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.
As reported in our News Update on 2 October, ASIC conducted a public consultation on its proposed guidance for establishing, implementing and maintaining a whistleblower policy that complies with the obligations under the Act.
We lodged a submission in response to the consultation that provided feedback to ASIC on the draft guidance and highlighted the practical difficulties that charities and NFPs would face in complying with the 1 January deadline.
In its response to submissions, ASIC acknowledged the feedback that Governance Institute and other organisations provided on the content of the guidance and have made significant changes to it.
One of the issues we raised in our submission was that the draft contained a mixture of mandatory requirements (must) and guidance (should). We argued this would make it challenging for readers of the guide to understand the difference between what ASIC considers to be best-practice or ‘gold’ standard and what is mandatory in order to comply with the Corporations Act.
ASIC has taken on board this feedback and updated the structure of the guide to differentiate the guidance relating to the Corporations Act requirements from good practice. The good practice guidance has changed to ‘good practice tips’ and is now contained in grey shaded text boxes. The guidance clarifies that entities are not required to follow the good practice tips, but following those tips and good practice guidance may assist them in enhancing the usability of their policies.
Importantly, ASIC has provided relief to small NFPs and charities from the requirement to have a whistleblower policy. The relief applies to public companies that are NFPs or charities with annual revenue of less than $1 million.
The exemption will provide small charities and NFPs with valuable breathing space.
These organisations need to understand that while they are exempted from the requirement to have a compliant policy, they must still otherwise comply with the whistleblower provisions in the Act.
Also, charities and NFPs with annual revenue above the threshold are not exempted from the requirement to have a compliant whistleblower policy. They must have a whistleblower policy that complies with the Act by 1 January 2020.