As with many pieces of legislation, the Corporations Act 2001 (Act) is built upon a 19th century regulatory model and was conceived in a pre-digital economy to cater to now-obsolete corporate structures. Over its lifespan, the legislation has been sporadically amended to keep up with change and to update its framework to fulfil the requirements of modern corporations.
Given the origins of the legislation and the ad hoc nature of amendments since its enactment, LexisNexis and Governance Institute of Australia carried out research to gauge the views of the Institute’s members as to whether they believe a review and holistic reform of the current Act is necessary.
Those surveyed were predominantly from publicly listed, proprietary, or notfor- profit organisations. Approximately 46 per cent of the respondents filled the role of company secretariat while remaining respondents consisted of board members, general managers, governance advisory or risk management professionals. See Figure 1.
This research follows submissions by Governance Institute to Treasury on the need to reform the Act with the aim of creating technology-neutral legislation, consistency of liabilities and defences under the law, and ultimately ensuring that Australia has corporate structures that are fit for purpose in the 21st century.
Members of Governance Institute who responded were divided in their views on the need for reformation, where two-thirds believed that there should be a wholesale review of the Act.