Virtual AGMs and electronic communication with shareholders
In the March sittings of Parliament the Government introduced the Treasury Laws Amendment (2021 Measures No. 1) Bill that would have extended the ability to hold virtual AGMs, execute documents electronically and use technology to communicate with shareholders to September 2021. The Bill also made changes to the continuous disclosure regime. The Bill was referred to the Senate Economics Legislation Committee for report by 12 March. In our submission to the Committee, we strongly supported modernisation of the Corporations Act 2001, but also gave practical feedback on how the Bill could be improved. The Committee’s majority report, which quoted Governance Institute’s submission, recommended the Bill be passed unamended. Following a second motion the Bill was referred to the Senate Economics References Committee for report by 30 June 2021. Given that the Treasurer’s temporary Determination expired on 22 March 2021, the position is as it was prior to the Determination was put in place. No vote in Parliament to address this uncertainty is now possible until May.
Governance Institute continues to advocate for resolution of the uncertainty around virtual AGMs and digital shareholder communications and will make a further submission to the Senate Economics References Committee and continue its advocacy in support of modernising the Corporations Act. We remain committed to working collaboratively with the Government, the Opposition, the crossbench and all industry stakeholders to enhance the digital shareholder experience.
We will keep members updated on this important issue.
Modernising Business Registers (MBR): Data standard on Director IDs
Governance Institute has made a submission to Treasury on the draft data standard and disclosure frameworks to support the implementation of the new Director IDs. Applications for Director ID numbers would be required to meet the requirements of this new data standard. The disclosure framework is required to enable the disclosure of Director IDs to ASIC and other government agencies. We will continue our involvement in the Modernising Business Registers Business Advisory Group and will keep members informed of the progress of the project.
ACNC governance standard changes
Governance Institute has made a submission to Treasury raising concerns with the expansion of ACNC Governance Standard 3. The Standard currently prohibits registered charities from acting in a way that may be dealt with as an indictable offence or a civil penalty of 60 or more penalty units. Breaches may result in deregistration as a charity. The Government released a draft legislative instrument for consultation to expand this Standard to include summary offences relating to real property, personal property or causing personal injury or harm to an individual. A registered charity would also risk deregistration if it failed to take reasonable steps to ensure its resources were not used to promote these offences.
Governance Institute’s submission highlighted that the breadth of summary offences cast a wider net than the Government may have intended, and that the steps that charitable boards of directors must take to mitigate deregistration risk would be impractical. Our submission also raised concerns that the draft regulation may exceed the powers given to the Minister by the ACNC Act. Governance Institute’s concerns about the proposal are shared by the sector more broadly and a number of other submissions on the proposal raised similar concerns.
ACNC increased reporting thresholds
Governance Institute has made a submission to Treasury indicating support for an increase to ACNC financial reporting thresholds to reduce the compliance burden on the charities sector.
The Government proposed to increase the ‘small’ reporting tier from $250,000 to $500,000, the ‘medium’ tier from $1 million to $3 million, and the ‘large’ tier from over $1 million to over $3 million. Governance Institute’s submission indicated a preference for the higher threshold increases recommended by the 2018 independent review. Our submission welcomed the Government’s ongoing commitment to reducing regulatory burden on the sector and acknowledged the importance of financial accountability and transparency to good governance in the sector. We also indicated a preference for simultaneously increasing reporting thresholds across the Commonwealth, state and territory jurisdictions so as not to impede progress on the wider harmonisation of charitable fundraising laws. However, we noted that if thresholds cannot be increased in a coordinated fashion in the short term, then the Commonwealth should take the lead and legislate to increase the thresholds as a catalyst for the states and territories to follow.
Royal Commission into Aged Care Quality and Safety
Governance Institute issued a statement welcoming the Final Report of the Royal Commission into Aged Care Quality and Safety. The Final Report quoted Governance Institute in support of its focus on governance as both a cause and a solution to issues in the sector. A key element of the Government’s response to the Final Report was a commitment to fund governance training for an estimated 3,700 sector leaders.
|Aged Care Royal Commission report says governance ‘essential’ to recovery: Governance listed as one of five pillars in Federal Government’s response — 01/03/2021|
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