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The Department of Home Affairs has issued its draft guidance “Modern Slavery Act 2018: Draft Guidance for Reporting Entities” (Draft Guidance) for the new Modern Slavery Act 2018 (Cth) (the Act).
Welcome to Edition 75 of Boardroom Brief.
This is a service specifically targeted at the needs of busy non-executive directors. 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.
Update on the ASX Corporate Governance Council’s proposed fourth edition of its Principles and Recommendations. On 6 August 2018, the Council published a status update, confirming that almost 100 written submissions had been received on the consultation version of the fourth edition of its Principles and Recommendations. Directors will no doubt be aware of the significant comment in the financial press from a number of prominent business figures, criticising the Council’s recommendations in relation to corporate values statements and “social license to operate”. The Council is now considering how best to address the issues raised during the course of preparing the final version of the fourth edition. See the Council’s media release. Also, all non-confidential submissions are now available here. A significant watering-down of several of the more contentious features of the recommendations now seems likely, which will no doubt be of relief to Directors who are already suffering under the burden of a raft of new legislation on corporate governance matters such as whistleblowing, data security and modern slavery.
Government injects $70.1 million into ASIC to bolster its enforcement capabilities. In keeping with the “corporate culture” focus we have seen this year, the Government announced last week a hefty injection of a further $70.1 million into ASIC for the purposes of strengthening the corporate regulator’s ability to combat misconduct in the financial services industry. The new funding is intended to bolster ASIC’s enforcement capabilities and enable it to undertake new regulatory activities and investigations. Directors should note that part of the funding has also been specifically benchmarked for supporting a re-focus of ASIC’s strategic direction on proactive enforcement and increased onsite supervisory activities. See Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer’s media release.
ASIC consults on proposal to create a Global Financial Innovation Network (GFIN). On 8 August 2018, ASIC, in collaboration with 11 other international financial regulators and related organisations, released a consultation paper on the proposed creation of the GFIN. As well as creating a framework for co-operation between financial services, Directors should note the aim of the GFIN is to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. Specifically, it is envisaged that the GFIN will perform three key functions: (i) act as a network of regulators to collaborate and share experience of innovation in respective markets, including emerging technologies and business models; (ii) provide a forum for joint policy work and discussions; and (iii) provide firms with an environment in which to trial cross-border solutions. The consultation closes on 14 October 2018.
ASIC publishes its enforcement outcomes report for the first half of 2018. ASIC’s enforcement outcomes report provides a high-level overview of its enforcement priorities and key decisions across corporate governances, financial services, market integrity and small business compliance during the period 1 January 2018 to 30 June 2018. Unsurprisingly, ASIC’s emphasis on “corporate culture” and “holding gatekeepers to account” is apparent both in the report itself and ASIC’s media release. Directors should note that, among other things, ASIC has stated that over the next six months, it will have a particular focus on companies with “poor corporate governance” and on poor financial reporting by listed companies.
Energy policy remains on foot. Following a meeting of State energy ministers last Friday in Sydney, the Commonwealth and the states have agreed to keep alive Malcolm Turnbull’s National Energy Guarantee Policy (NEG), although a final process of determination will not happen before September. As we noted in last week’s Boardroom Brief, this was a “make-or-break” meeting for the NEG. An immediate outcome was that the ministers agreed to allow a one-month consultation on state-required legislation to implement changes to the national energy market rules, assuming Energy Minister Frydenberg obtains party room sign-off next Tuesday on the emissions reduction components of the NEG. Directors of companies with material exposure to energy prices should closely monitor developments in this rapidly evolving area.
Upcoming deadlines for various consultations.