Governance Institute’s pre-budget wish list
The Governance Institute of Australia’s pre-budget submission recommends various ways in which the government could improve regulation and help reduce the costs and inefficiencies in doing business and running charities.
In its January submission to Treasury, Governance Institute calls on the government to establish an independent body to assist with law reform. Armed with appropriate expertise and supported by a legal committee, it says this body could provide advice outside the constraints of the political and electoral cycle. Its aim would be better regulation, not increased regulation.
Governance Institute also recommends that the government update the Corporations Act to make it technology-neutral and to shift it from its basis from a “hard copy” world. A first step could be the introduction of electronic or digital shareholder communications, but the ultimate aim should be to enable all transactions and business to be carried out digitally end-to-end.
“Regulation should not make it more difficult and expensive to conduct business through purely digital channels,” says Governance Institute.
Another suggestion is that the government conduct a wholesale review of corporate reports in a bid to reduce compliance costs and facilitate shareholder engagement. As Governance Institute points out, many commentators believe that corporate reporting needs to be improved and that the current regime is too complex and too difficult to navigate.
Governance Institute would also like to see the government maintain momentum and funding for the Modernising Business Registers Project, noting that its members report significant inefficiencies and costs in using existing registers.
It adds that company secretaries should be included in the Director Identification Number reforms to address information confidentiality and security concerns around the publication of personal data.
Governance Institute also asks the government to pass legislation to empower regulators to address potential anti-competitive conduct in relation to the CHESS Replacement Project. It points to concerns that the project could further entrench the Australian Securities Exchange’s existing monopoly powers over post-trade services and extend these into other areas.
In addition, Governance Institute says the government should continue its whistleblowing reform by enacting a stand-alone whistleblower protection regime (applicable to the private sector) in its own Act and establishing a lead agency, such as an Ombudsman or Office of the Whistleblower, which has a whistleblower protection role.
When it comes to the not-for-profit sector, Governance Institute says the government could help charities to better respond to the current bushfires and drought by reforming the fundraising regulatory regime through minor amendments to the Australian Consumer Law to ensure its application is clear and broad.
Governance Institute says the current piecemeal state and territory-based regulatory framework which governs fundraising is fragmented, burdensome, rarely enforced and is fundamentally failing in its objective to protect donors and provide for transparency, public trust and confidence in fundraisers at a time when this is most needed.
Indeed, Australian Charities and Not-for-profits Commission (ACNC) Commissioner Gary Johns warned in November that those wanting to fundraise should not start until they were familiar with how fundraising was regulated in their state or territory.
Governance Institute says not-for-profits continue to waste significant amounts of time and money in meeting outdated fundraising laws. “The government has also not yet released its response to the ACNC review which is critical for the sector.”
Governance Institute adds that including the company secretary on the ACNC register would help the ACNC register to function as a “one stop shop” for third parties.
The Australian Securities and Investments Commission no longer maintains updated information on directors and company secretaries of companies regulated by ACNC.
“Our members consistently report to us the practical issues their organisations face due to the inability of banks, landlords and other third parties to easily locate the details of the company secretary on the ACNC register,” Governance Institute says in its submission.