This is a service specifically targeted at the needs of busy non-executive directors (NEDs).  We aim to give you a ‘heads up’ on the things that matter for NEDs in the week ahead – all in two minutes or less.

In this edition, we discuss the Australian Accounting Standards Board’s (AASB) release of the draft climate disclosure standards for public consultation, as well as the Australian Institute of Company Directors’ (AICD) publication of a ‘director’s guide’ to preventing workplace sexual harassment. We also examine a Supreme Court of Western Australia case in respect of share register request requirements. We also observe that the Supreme Court of Western Australia has followed the approach taken by other national superior courts with respect to the conduct, procedure and evidence requirements applicable to members’ schemes of arrangement.

In Over the Horizon, we discuss Prime Minister Anthony Albanese’s doubling of financing for critical minerals projects under the Australian Critical Minerals Facility during the first Australia-United States Taskforce on Critical Minerals meeting.

REGULATION

AASB releases draft Australian Sustainability Reporting standards for consultation.  On 23 October 2023, the AASB released exposure draft ED SR1 Australian Sustainability Reporting Standards – Disclosure of Climate-related Financial Information for public consultation.  This release is the latest step towards the adoption of national reporting standards for sustainability-related disclosures.  The exposure draft includes three draft Australian Sustainability Reporting Standards commencing 1 July 2024, and is open for comment from stakeholders until 1 March 2024.  The AASB has outlined specific matters for comment in the exposure draft in addition to seeking views whether the proposals result in climate-related information that is useful to users and “in the best interests of the Australian economy”.  See AASB media release.

GOVERNANCE

AICD releases director’s guide to the positive duty to prevent workplace sexual harassment.  On 24 October 2023, the AICD released its publication titled “Positive duty to prevent workplace sexual harassment: A director’s guide” (Guide).  The Guide outlines directors’ obligations under the duty to prevent workplace sexual harassment, provides practical guidance aimed at elevating workplace sexual harassment issues to the board level and outlines key questions to be addressed to management teams.  The framework adopted by the Guide follows the seven standards to prevent and respond to sexual harassment and sex discrimination contained in the Australian Human Rights Commission Positive Duty Guidelines.   Directors are reminded that the duty to prevent workplace sexual harassment requires employers to take reasonable and proportionate measures having regard to the size and resources of their business.  See AICD Guide.

LEGAL

Western Australia follows harmonised approach to schemes of arrangement.  On 18 October 2023, the Supreme Court of Western Australia issued a new Practice Direction to adopt the Practice Note – Harmonisation in schemes of arrangement as developed by the Committee for the Harmonisation of Rules of the Council of Chief Justices of Australia and New Zealand.  In doing so, the Supreme Court of Western Australia has followed both the Federal Court of Australia and the Supreme Court of New South Wales (see previous edition of Boardroom Brief).  The new Practice Direction is a further consolidation of the harmonized approach across superior courts with respect to the conduct, procedure and evidence requirements applicable to members’ schemes of arrangement.  See Supreme Court of Western Australia Consolidated Practice Directions at PD 9.5.2.

Supreme Court rules that email addresses form part of share register.  On 26 October 2023, the Supreme Court of Western Australia published the decisions for Howard J’s decision to make a declaration to the effect that, once a shareholder nominates an electronic address for the purpose of receiving shareholder communications, then the register of members must contain the nominated electronic address.  The proceedings were brought by AVZ Minerals Ltd (ASX: AVZ) (AVZ), which sought a declaration that it had compiled with its obligation under the Corporations Act to permit inspection of its register of members.  Fat Tail Holdings Pty Ltd (Fat Tail), the defendant in these proceedings, had nominated three people to be elected as directors of AVZ at its annual general meeting, and sought to inspect AVZ’s register of members in order to communicate with other shareholders in AVZ.  AVZ provided Fat Tail with a “soft copy” of the register of members that did not contain email addresses, despite approximately 28% of members electing email as their preferred means of communication.  Justice Howard made the declaration sought, as well as an order requiring AVZ to provide Fat Tail with a copy of AVZ’s register of members including any email addresses and other electronic addresses. See AVZ Minerals Ltd v Fat Tail Holdings Pty Ltd [2023] WASC 403.

OVER THE HORIZON

Australia further commits to critical minerals but falls short amidst global energy transition race.  On 25 October 2023, Prime Minister Anthony Albanese announced the doubling of finance to the Australian Critical Minerals Facility, from A$2 billion to A$4 billion, during his trip to Washington DC with Resources Minister Ms Madeleine King.  Mr Albanese stated that his “government is committed to transforming Australia into a renewable energy superpower and harnessing the critical minerals we have at home is crucial to this” and that he wants “to move Australia up the international value chain in critical minerals, energy and manufacturing”.  This announcement comes after the inaugural meeting of the Australia-United States Taskforce on Critical Minerals on 23 October 2023 and the convening of the government-to-business Critical Minerals Industry Roundtable on 24 October 2023.  Despite industry criticism of the size of the Facility relative to the over US$1 trillion (A$1.6 trillion) industrial and energy stimulus commitment made by the US government, it is an example of the strategic importance placed by the two allies on the development of the ex-China critical mineral industry.  See Prime Minister’s Media Release.