Modernising the Corporations Act
Regulatory uncertainty remains on the Government’s proposed modernisation reforms to the Corporations Act 2001. ASIC has adopted a ‘no-action’ position on virtual AGMs that is now in force, however this does not protect entities from shareholder action. The bill that would have temporarily extended regulatory relief on virtual meetings using technology, the electronic execution of documents and the use of technology to communicate with shareholders remains under review by a second Senate Committee due to report by 30 June. No vote on the bill is possible before 11 May at the earliest.
In late April, after consulting widely with members, the Policy Team made a second submission to the Senate sub-committee reviewing the bill. The submission:
- outlined the negative impacts of the legislative delay.
- urged Parliament to correct the defects in several provisions of the bill.
- reiterated the support of members for hybrid and virtual-only AGMs, electronic document execution and digital shareholder communications.
- supported the Government’s proposed amendments to Australia’s continuous disclosure regime to balance the benefits to shareholders and the market of continuous disclosure obligations with the costs imposed on entities and officers (including company secretaries) by securities class actions.
To further its advocacy efforts, the Policy Team engaged with key members of the Senate Standing Committee on Economics. We will inform members of any updates as the bill leaves committee and is debated by Parliament.
Guidance on virtual AGMs and e-documents
To help members navigate the ongoing regulatory uncertainty around holding AGMs and executing electronic documents, Governance Institute has produced a new guide as a joint initiative with the Australian Institute of Company Directors, Australasian Investor Relations Association, and the Business Law Section of the Law Council of Australia.
Key issues covered in the guide include:
- The latest legislative and regulatory updates, and what these mean for holding virtual-only AGMs, hybrid AGMs and issuing notices of meeting.
- Tips for holding AGMs in the current environment, including how to build in flexibility in case of changing circumstances such as another COVID-19 outbreak.
- Insights from the 2020 AGM season on how to best prepare, mitigate risks and engage shareholders at meetings that use digital technology.
- What you need to consider before and during the AGM.
This is a highly practical resource for members and an important partnership with major stakeholder organisations.
Transition to director IDs
The Policy Team has made a submission on Treasury’s draft legislative instruments that relate to the transitional arrangements for company directors to apply for a director identification (ID) number under the Modernising Business Registers (MBR) Program.
In the submission we:
- supported the extension of the transition period for new directors to obtain a director ID to 30 November 2022 and provided feedback on other transitional arrangements.
- renewed our calls for company secretaries to be included in the Director ID scheme.
- recommended that personal details of directors such as home address and date of birth are not made publicly available on the new Director ID register to protect against identity fraud.
We will keep members informed of the progress of this important project.
Board papers guidance
There has been a strongly positive reaction to Governance Institute’s new board papers guidance, which was drafted in close consultation with policy committee members. The guide outlines the purpose of board papers, how to overcome common mistakes, writing style tips, and how to put in place a leading-practice board paper policy. A high-quality sample board paper template is included.
Governance Institute is continuing to advocate for a nationally consistent and fit-for-purpose charitable fundraising regulatory regime. The Policy Team recently met with sector leaders including Justice Connect and Public Fundraising Regulatory Association (PFRA) to leverage a unified sector voice to government. We also met with key officials in charge of the Government’s New Deregulation Agenda Taskforce to urge that charitable fundraising reform be made a priority. Our next step is to advocate to key stakeholders on National Cabinet to ensure the issue remains firmly on the national agenda and that real, measurable progress towards a cross-border recognition model is achieved this year.
Governance Institute is preparing its coverage of Federal Budget 2021-22 that is to be handed down 11 May. On budget night the Governance Institute team will bring members the latest reports and analysis on key measures and critical issues that impact governance and risk professionals in all sectors.
Digital transformation guidance
A new Good Governance Guide on Digital Transformation has been published to assist members. The resource draws on the expertise of the Risk and Technology Committee to give guidance on the business imperative of digital transformation, its definitions and common components, the skills and tools needed for successful implementation, and the key roles of the board and other parts of the organisation in oversight of digital transformation projects. Members can now download the guide from Governance Institute’s online resource centre.
|Corporations (Director Identification Numbers - Transitional Application Period) Instrument 20 —16/04/2021|
|Director Identification Number Data Standard and Disclosure Framework — 01/04/2021|