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.
In this Edition, we consider ASX’s updated guidance on CHESS and continuous disclosure, the Takeovers Panel’s steadfast approach in relation to Cardinal Resources Limited and an industry report on company culture. We also consider some cases providing important reminders to companies with respect to continuous disclosure obligations and the careful drafting of contract terms for business or asset purchases. As our final Boardroom Brief for the year, we then look ahead to what we can expect in 2021.
YOUR KEY BOARDROOM BRIEF
ASX releases updated guidance on CHESS and continuous disclosure. announcement
Takeovers Panel reinforces Cardinal decision. media release
ASIC continues to commence proceedings for alleged breaches of continuous disclosure obligations. media release
Court case reminds of the importance of carefully drafted contract terms. LEA Child Care Services v Development Learning Centre Rainbow Pty Ltd [2020] VSC 787
AICD and ACSI report on company culture. media release joint report
OVER THE HORIZON
What can we expect in 2021? As we are all aware, the past year has been unprecedented on many fronts. The task of regulators and the market more generally to address this will likely continue well into 2021 and beyond. There are countless items for boards to continue (or start) to think about for the new year - we consider the key items for the year ahead will include:
de-globalisation trend : the logistical barriers imposed by COVID-19, paired with Brexit and resistance to China hegemony will likely lead to further de-globalisation. Although Australia has gained greatly from globalisation in the 21st century, we may find pockets of opportunity emerging from the reversal of this trend, in sectors such as defence, life sciences, technology and manufacturing;
labour and expertise : the above de-globalisation drivers (amongst many other factors) may lead to labour and expertise shortages, which will become critical across many industries;
approach to fiscal policy : we expect that Government fiscal policy will shift away from cash injections, and instead move towards initiatives which will promote job creation and the “return to work” and drive further investment;
addressing the shift to virtual life : virtual platforms will be more important than ever in 2021, and regulators and the market will need to respond accordingly. As we have already started to see over the past year, regulatory platforms will be reshaped, and this will be largely informed by digital platform laws;
market sentiment and activity : vaccine roll-out and success or setbacks will drive market sentiment. Despite a low volume of M&A activity in 2020, future success in the national and global approaches in addressing COVID-19 will drive risk-on mentality and M&A activity; and
reforms galore : while there have been various reforms introduced with respect to FIRB, ASIC and ASX guidance over the past year, we expect the Government and regulators are still taking some time to process the lasting impacts of COVID-19. Therefore, changes to regulation will continue - if not increase - in 2021.