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Acting for You, February 2018

Whistleblowing (draft bill) released

The government introduced the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 into parliament at the beginning of December 2017. Intended to consolidate the whistleblower protections in the corporate, financial and credit sectors into a single regime under the Corporations Act 2001, the bill follows the release of exposure draft legislation for consultation in October 2017. The intended effective date is 1 July 2018 but it is proposed that organisations will have until 1 January 2019 to introduce a whistleblower policy that complies with the requirements in the bill.

Governance Institute has advocated for some time about its concerns that the current provisions governing the protection of whistleblowers are poorly regarded, infrequently used and narrowly focused (Acting for You March 2017, June 2017, November 2017). Governance Institute is also a partner in groundbreaking research led by Griffith University about how whistleblowing processes and systems currently work — or do not work — in organisations.

Key changes in the draft bill from the Exposure Draft include the following.

  • Tightening the preconditions to a whistleblower being able to make a protected disclosure to the media or a member of parliament and providing that a whistleblower must, after the expiration of a reasonable period, give notice to the regulator to which they made the original disclosure advising them that they intend to make an emergency disclosure. The definition of journalist has also been narrowed.
  • Enabling a company to disclose the identity of a whistleblower to the company’s lawyer for the purposes of obtaining legal advice — there have been no changes to the other provisions in relation to the confidentiality of a whistleblower’s identity.
  • Providing for a range of legal remedies for whistleblowers who suffer detriment — compensation, injunctive relief, an order requiring the first person to apologise, reinstatement of employment, exemplary damages and any other order the court thinks appropriate.
  • The class of persons to whom a person may make a disclosure has been extended to ‘a person who supervises or manages the individual’ which dramatically extends the number of persons to whom a disclosure may be made. Previously, the Exposure Draft provided for the disclosures to be made to ‘senior managers’.
  • An expanded definition of eligible whistleblower — previously, a spouse or child of persons within the categories of eligibility could be a whistleblower. Now a relative of a person falls within the category. A relative has a broader definition than spouse or child and includes a parent, remoter lineal ancestor, remoter issue, brother or sister.
  • An expanded range of information required to be in a whistleblower policy and removal of the requirement to have whistleblower policies available to all potential whistleblowers. Policies now need to be available to officers and employees of the company.

Governance Institute will continue to keep members updated on this matter.

Managing culture

Both ASIC and APRA have signalled for some time that they see corporate culture as a ‘key risk area’ for companies, due to the strong connection between poor culture and poor conduct, with ethical conduct going to the heart of that. ASIC has been sending strong messages that gatekeepers have an essential role to play in setting the tone from the top and ensuring it cascades throughout the entire organisation. Our annual Ethics Index plays a role in allowing gatekeepers to assess whether their oversight and implementation of culture and ethical conduct is perceived as being up to the mark by those affected by it, which in the final count is the community at large.

Governance Institute partnered with the Institute of Internal Auditors, Chartered Accountants Australia and New Zealand and The Ethics Centre to launch Managing culture  A good practice guide in December 2017. This practical guide argues that the role of boards is to determine the purpose, values and principles of the company, that the CEO and senior management have the responsibility for implementing the desired culture and that personnel in human resources, ethics, compliance and risk functions all have a role to play in embedding values and ethics.

The launch featured a panel discussion facilitated by Executive Director of The Ethics Centre, Simon Longstaff, and included ASIC Commissioner John Price, Regnan CEO Pauline Vamos and ASX Corporate Governance Council chair Elizabeth Johnstone. The panel shared their insights and discussed creating ethical frameworks and a positive workplace culture. The Guide is an important resource for all organisations and leaders. The guide can be downloaded from the Governance Institute website here.

Modernising business registers

In December 2017 the government announced it had opened a request for information (RFI) to explore potential solutions for a potential whole-of-government business registry platform. The new platform is part of the government’s National Business Simplification Initiative which includes a plan to modernise key business registers including; the Companies and Business Names Register, administered by ASIC, and the Australian Business Register, administered by the ATO. During the public consultation on these proposals in 2017 Governance Institute’s expressed its support for the Principles for modernised business registry services and the Government’s commitment to reducing complexity for business in managing their legal and regulatory obligations and bringing together registry services where possible — see Governance Institute’s submission Modernising Business Registry Services September 2017.

Governance Institute will continue to keep members updated on this matter.

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