Banking royal commission: Final report
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry released its final report on 4 February 2019.
Governance Institute provided a submission to the royal commission which was discussed in the November 2018 issue of Acting for You.
In response to the Final Report, Governance Institute released on 22 February Insights: Governance Issues arising from the banking royal commission containing expert policy analysis and guidance for governance professionals. This is the first in a series of papers which Governance Institute will be publishing on the issues arising from the royal commission.
ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 4th edition
The ASX Corporate Governance Council released the 4th edition of its Corporate Governance Principles and Recommendations on 27 February 2019.
We reported on issues arising from the drafting process in the June and September 2018 editions of Acting for You.
To mark the launch of the 4th edition of the Principles, Governance Institute has issued an Insight into the 4th edition to assist our members prepare for the implementation of the Principles and Recommendations.
Whistleblower reform Act passed
Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 passed both Houses on 19 February 2019 (having been amended in the Senate in December).
The bill creates a single whistleblower protection regime in the Corporations Act 2001, to cover the corporate, financial and credit sectors, and creates a new whistleblower protection regime in the taxation law to protect those who expose tax misconduct.
Governance Institute has long supported whistleblower reform and gave evidence before the Parliamentary Joint Committee Inquiry into whistleblower protections in the corporate, public and not for profit sectors in April 2017.
- broaden the whistleblower definition to include both current and former employees, officers, and contractors, (as well as their spouses and dependants), and anonymous disclosures
- extend the protections to whistleblower reports that allege misconduct or an improper state of affairs or circumstances about any matter covered by financial sector law, as well as all Commonwealth offences punishable by imprisonment of 12 months or more
- create civil penalty provisions, in addition to the existing criminal offences, for causing detriment to (or victimising) a whistleblower and for breaches of confidentiality
- provide protections for disclosures to journalists and parliamentarians in certain circumstances
- provide whistleblowers with easier access to compensation and other remedies if they suffer loss
- require all public companies, large proprietary companies, and corporate trustees of registrable superannuation entities to have a whistleblower policy.
The reforms commence on 1 July 2019.
Modernising business registers and Director Identification Number
The government’s Modernising Business Registers (MBR) Program has reached another milestone with a package of bills modernising Commonwealth registers and introducing a Director Identification Number (DIN) being introduced to the House of Representatives on 13 February 2019. The legislative package creates a new Act and makes related amendments to a range of existing laws to create a new Commonwealth business registry regime. It sets out:
- What information is subject to the new regime
- Who may be appointed to administer the new regime as its registrar
- The functions and powers of the registrar
- How the registrar performs its functions and exercises its powers
- The framework for protecting and disclosing information held by the registrar; and
- Other matters to support the new regime.
The bill also introduces a DIN requirement. The government has stated that the object of the DIN is to promote good corporate conduct, in particular, to assist regulators to detect and address unlawful behaviour such as phoenixing. It is intended that the introduction of the DIN will be part of the MBR Project.
The bills have been referred to the Senate Economics Legislation Committee for inquiry and report by 26 March 2019.
As reported in the November issue of Acting for You, Governance Institute lodged a submission in response to the exposure draft of these bills on 28 October 2018. We have also been involved in discussions with the MBR project team as part of its extensive stakeholder engagement program. We continue to advocate for company secretaries to be included in the DIN regime and for company secretary identification details to be removed from the public part of the register.
Our members are an important user group of government business registers and the MBR project will change the way that they interact with registries.
The MBR project is a complex change program which aims to create a modern business registers system by consolidating 32 ASIC and ABR registries at the ATO.
The following six core business registers:
- business names
- foreign companies
- registered Australian bodies
- reserved companies names
will be consolidated with the:
- 11 professional and financial services registers (financial advisers, auditors, liquidators etc)
- 3 banned and disqualified registers (for example, register of disqualified company directors and other officers) and
- 12 historical registers (for example, Life Insurance Brokers, Carbon Registrants).
It is intended that users of the modernised registry service will experience a single unified dataset, easier interaction with government systems and efficiencies to meet obligations.
We will continue to update members on this important project and keep you advised of submissions which we make to government.
The government has introduced the Treasury Laws Amendment (Combatting Illegal Phoenixing) Bill 2019 into Parliament and it has been referred to the Senate Economics Legislation Committee for inquiry and report by 26 March 2019.
As advised in the November 2018 edition of Acting for You, Governance Institute lodged a submission on the exposure draft legislation on 27 September 2018 highlighting our members’ concerns over the consequences which will apply as a result of a failure to notify ASIC of a director resignation within the 28 day period.
Submissions on the draft bill are due to be lodged by 14 March and we will continue to update our members on this important issue.
As a member of the #fixfundraising Coalition, Governance Institute endorsed the NFP Law Submission to the Senate Select Committee on Charity Fundraising in the 21st Century (Acting for You, September 2018). The submission asked the Senate Select Committee to recommend the federal government actively support and assist with the development of a nationally-consistent, contemporary and fit-for-purpose charitable fundraising regime for implementation no later than mid- 2019 by:
- initiating (or at least supporting) amendments to the Australian Consumer Law to ensure its application to fundraising activities for and on behalf of charities (and other not-for-profit organisations) is clear and broad;
- urging the repeal of existing fragmented State and ACT fundraising laws; and
- working with other Australian Consumer Law regulators, the ACNC, self-regulatory bodies and sector intermediaries to draft and consult publicly on a core mandatory code to be enforced under the Australian Consumer Law multi-regulatory framework.
The Senate Select Committee issued its report on 19 February 2019. The committee unanimously recommended the government provide a response to the six-month old Australian Charities and Not-for-profits Commission review report (to which Governance Institute provided a submission on 28 February 2018) and work with states, territories and the NFP sector to develop a national model within two years. While disappointed with the lack of a clear solution to the problem, Governance Institute will continue to advocate for reform to charitable and not-for-profit fundraising and will keep members update on this important issue.