Boardroom Brief – Week commencing 12 October 2026

Governance

AFCA: boards cannot outsource judgement on claims and complaints.

On 6 October 2026, AFCA published Edition 9 of its Systemic Issues Insights Report, covering systemic issues identified in the second half of the 2025–26 financial year. AFCA is not a regulator, but it reports on systemic issues in the financial sector to the Australian Securities and Investments Commission (ASIC) under ASIC Regulatory Guide 267. Firms must also identify and fix systemic issues in their own complaints under ASIC Regulatory Guide 271. The key message is that boards and superannuation trustees must form their own view on claims, complaints and remediation, rather than defer to insurers, administrators or other providers. Directors should keep in mind that:

• Outsourcing does not shift responsibility. The firm remains responsible for outcomes that rely on insurers, assessors, administrators or collection agents. Management should have access to the underlying information and test significant adverse decisions independently.
• Failures should be visible. Systems handling instructions, hardship arrangements and complaints should flag exceptions, including transactions that should have occurred but did not.
• Board reporting should look beyond numbers. Board papers should do more than count complaints. They should explain what complaints, AFCA referrals and systemic issues reveal about whether claims, complaints and remediation controls are working.

Regulatory

ACCC explains how it will enforce merger notification and reissues its information-gathering guidelines.

Since 1 January 2026, businesses must notify the ACCC of acquisitions that meet the notification thresholds under the CCA and must wait for approval before completing the acquisition, unless a waiver or exemption applies. On 8 October 2026, the ACCC published a fact sheet on how it will enforce the new regime. When deciding whether to go to court over a deal that should have been notified, the ACCC considers factors such as deal size, the industry affected, why the deal was not notified, the public interest, any remedy offered and the deterrent value of action. Consequences can include penalties, divestiture or the court voiding the deal.

Since 16 September 2026, non-notified deals are no longer automatically void. Instead, the Federal Court may void them on the ACCC's application. The same amendments clarify the ‘control’ exemption and allow expired approvals to be extended, as we address in a recent G+T insight. Deals below the thresholds can still be challenged under section 50 of the CCA if they are likely to substantially lessen competition.

On 7 October 2026, the ACCC reissued its guidelines on section 155 of the CCA. This is its power to compel information, documents and evidence in both merger reviews and investigations. Directors should ask two questions. First, who decides that a deal does not need to be notified, and on what advice? Second, could the company respond to an ACCC notice quickly and completely, while protecting privileged material? Frequent acquirers and companies doing asset or minority-stake deals should take particular care, as the regime is not limited to acquisitions of control.

Legal

Takeovers Panel rejects shareholder challenge to Cygnus takeover.

On 7 October 2026, the Panel published its reasons for declining, on 3 August 2026, to hear two Cygnus shareholders’ challenge to Central Asia Metals PLC’s (CAML) proposed acquisition of Cygnus by scheme of arrangement. The Panel considered there was no reasonable prospect of declaring the circumstances unacceptable. It found that a Cygnus director’s role as director of major shareholder Ocean Partners (which granted CAML an option over 9.9% of Cygnus shares) did not make him a 'participating insider' under the Panel’s Guidance Note 19, at least absent a rival proposal, as Ocean Partners received no benefit unavailable to other shareholders. The deal protections procured by CAML, including voting intention statements, the option from Ocean Partners and a break fee of no more than 1% of deal value, were not unusual or extreme. Complaints about an unreleased updated mine study were premature, as ASIC and the Court will review the scheme booklet. Directors should keep in mind the Panel's warning that its view on the director “may change if a competing proposal emerges”. In a takeover, director links to shareholders supporting a bidder should be identified, disclosed and documented early, and boards should be ready to put conflict protocols (such as the formation of an independent board committee) in place quickly if a rival bid emerges. These arrangements support directors’ duties to act with care and diligence (section 180), in good faith in the company’s best interests (section 181), and assist compliance with the material personal interest rules (sections 191 and 195) of the Corporations Act 2001 (Cth).

First penalty for an insurer over poor claims handling.

On 9 October 2026, the Federal Court ordered Hollard Insurance Partners Limited (Hollard) to pay a $2 million civil penalty for breaching its duty of utmost good faith. ASIC says this is the first such penalty against an insurer. Hollard admitted that delays and poor communication meant it took more than three years to finalise a Victorian family’s home insurance claim, while their storm-damaged home became uninhabitable. Justice Button found the conduct “fell well short” of the required standard, and that staff busyness or poor communication with suppliers did not excuse the delays. Directors should keep in mind that a single mishandled claim can now attract a penalty, and the Hollard decision now sets a benchmark. Boards should be able to show they have clear visibility of long-running, high-impact claims, clear triggers to escalate stalled claims and assurance that outsourced providers (such as loss adjusters and builders) meet set timeframes and communication standards.

Over the Horizon

Cutting red tape could add $20 billion a year to Australia’s economy, AICD research finds.

The Stagnant Nation: Lifting Australia’s Dynamism, a report prepared by Mandala Partners on behalf of the AICD, and released on 8 October 2026, finds that heavy regulation is holding back productivity, investment and wages. Australia’s measured regulatory burden has grown substantially (now 33% higher than the Organisation for Economic Co-operation and Development average), creating material costs for the Australian economy. According to the report, returning the regulatory burden to late-2000s levels could lift gross domestic product (GDP) by at least $20 billion a year over the next decade. The AICD is calling for an independently chaired public sector taskforce to review and recommend targeted reforms. It also wants the Australian Government to adopt Productivity Commission recommendations on better regulation-making, add real consequences to environmental approval deadlines and extend automatic recognition of occupational licences. Notably, it proposes removing Group 3 entities from mandatory climate reporting, which it estimates would save around 3,000 organisations $2 billion over four years. Unless the law changes, Group 3 reporting commences from 1 July 2027. Affected boards should continue reporting preparations while monitoring the Government’s response to these recommendations.