In this edition, we cover the second edition of Ethics in the Boardroom, jointly published by the Australian Institute of Company Directors (AICD) and The Ethics Centre, and key governance takeaways from the 10th Australian Governance Summit. In regulatory news, we report on the Australian Prudential Regulation Authority's (APRA) roadmap for bank capital and liquidity reforms and the Australian Securities and Investments Commission's (ASIC) consultation on enhanced beneficial ownership disclosure for listed entities. In our legal update, we look at ASIC's five-year disqualification of a Victorian director linked to the collapse of Forum Finance Pty Limited (Forum Finance) and related entities.
In Over the Horizon, we consider distress readiness for Australian boards as the Middle East conflict moves from shipping lanes to funding lines.
Governance
New ethics guide puts AI and geopolitical readiness on the board agenda
On 16 March 2026, the AICD and The Ethics Centre jointly published the second edition of Ethics in the Boardroom: A decision-making guide for directors. The guide, updating the 2019 first edition, gives boards a practical framework for working through difficult decisions, including those involving rapid technological change. It uses a 'four lenses' model covering the organisation’s ethics framework, the board's collective culture and character, interpersonal relationships and power dynamics and the individual director’s role, together with a five-phase decision-making framework: Frame, Shape, Evaluate, Refine and Act. It also includes a dedicated AI case study and guidance on common boardroom traps such as groupthink and reactive decision-making under time pressure.
The launch followed the 10th Australian Governance Summit (10–11 March 2026) (AGS26), bringing together 1,700 participants. In its 12 March 2026 highlights, the AICD reported that in a poll during the AGS26, only 1% of respondents believed their board was ‘highly prepared for a geopolitical threat’. The updated guide is a useful addition to director induction packs and chair-led culture reviews, and the AGS26’s 1% prepared data point is a practical prompt for boards to schedule a near-term geopolitical scenario-planning session using the four-lenses framework.
ASIC consults on enhanced beneficial ownership disclosure, extending reach to equity derivatives
On 10 March 2026, ASIC released Consultation Paper 387 Enhanced beneficial ownership disclosure – Proposed legislative instrument, form and guidance (CP 387), setting out how it proposes to implement Schedule 1 of the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025 (Cth). The reforms require certain equity-derivative exposures and offsetting short positions to be considered in substantial holding and tracing disclosures, making it easier for boards, investors and the market to see who ultimately owns, controls or may influence listed entities. They will also align foreign-registered entities listed in Australia with Australian disclosure standards, improve access to tracing information and strengthen penalties for non-compliance. The package includes a draft ASIC legislative instrument, a new Substantial Holding Notice and draft updates to ASIC Regulatory Guides 5, 9 and 222. Submissions closed on 21 April 2026. ASIC expects to release the final instrument, notice and guidance in July 2026, with the reforms due to commence on 4 December 2026.
Boards of listed entities, including foreign corporations, should ask management, company secretarial and registry teams to review systems, training and disclosure processes ahead of commencement. This includes processes for monitoring substantial holder notices, responding to tracing notices, maintaining registers of relevant interests and assessing whether derivative, securities-lending and prime-broking arrangements need to be disclosed under the new regime.
Regulatory
APRA outlines bank capital and liquidity reforms
On 16 March 2026, APRA Chair, Mr John Lonsdale, delivered a keynote at the 2026 AFR Banking Summit. APRA also published an accompanying letter to all authorised deposit-taking institutions (ADIs) outlining a staged, broadly cost-neutral consultation roadmap across three workstreams:
- (i) targeted changes to standardised credit-risk capital settings, including for:
- large domestic public infrastructure
- high-quality unrated corporate exposures
- residential property development.
- (ii) liquidity reform, including:
- a possible Pillar 2 liquidity framework for larger banks
- a more risk-sensitive Minimum Liquidity Holdings framework for smaller ADIs
- broader high-quality liquid asset eligibility.
- (iii) a simplified Australian implementation of the Basel Committee's Fundamental Review of the Trading Book standard for market risk.
APRA expects to stagger consultations, beginning with standardised credit-risk changes in the first half of 2026. Mr Lonsdale said that, although Australia’s bank liquidity framework is adequate, it “has not kept up with international practice and needs to be uplifted”. Directors of ADIs, particularly smaller institutions, should engage early on the liquidity proposals and assess how changes may affect funding strategy and liquid asset holdings. Boards of listed entities that rely on bank funding, including infrastructure sponsors, residential property developers and unrated corporates, should also track the credit-risk capital proposals, as they may affect bank appetite, pricing and tenor for those exposures.
ASIC consults on enhanced beneficial ownership disclosure, extending reach to equity derivatives
On 10 March 2026, ASIC released Consultation Paper 387 Enhanced beneficial ownership disclosure – Proposed legislative instrument, form and guidance (CP 387), setting out how it proposes to implement Schedule 1 of the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025 (Cth). The reforms require certain equity-derivative exposures and offsetting short positions to be considered in substantial holding and tracing disclosures, making it easier for boards, investors and the market to see who ultimately owns, controls or may influence listed entities. They will also align foreign-registered entities listed in Australia with Australian disclosure standards, improve access to tracing information and strengthen penalties for non-compliance. The package includes a draft ASIC legislative instrument, a new Substantial Holding Notice and draft updates to ASIC Regulatory Guides 5, 9 and 222. Submissions closed on 21 April 2026. ASIC expects to release the final instrument, notice and guidance in July 2026, with the reforms due to commence on 4 December 2026.
Boards of listed entities, including foreign corporations, should ask management, company secretarial and registry teams to review systems, training and disclosure processes ahead of commencement. This includes processes for monitoring substantial holder notices, responding to tracing notices, maintaining registers of relevant interests and assessing whether derivative, securities-lending and prime-broking arrangements need to be disclosed under the new regime.
Legal
ASIC disqualifies Victorian director for maximum five-year period
On 13 March 2026, ASIC announced the disqualification of Victorian director Mr Vincenzo Frank Tesoriero until 23 February 2031, the maximum period available under section 206F of the Corporations Act 2001 (Cth), following his involvement in the failure of 20 companies, including Forum Finance. ASIC found that Mr Tesoriero caused or allowed 11 companies to receive over $2.1 million from Westpac that appeared to have been obtained through fraud. ASIC also found that he caused or allowed nine companies to make payments totalling nearly $200,000 towards the mortgage on his personal residence. Mr Tesoriero also failed to ensure Australian Taxation Office (ATO) lodgements were made for nine companies, failed to ensure 17 companies kept adequate books and records, and failed to submit reports to the liquidator for 19 companies. Forum Finance itself failed to record approximately $300 million of inflows and outflows in its bank account.
This is the second maximum section 206F disqualification announced by ASIC in recent weeks, following the disqualification of Mr Claudio Criniti announced on 4 March 2026, as discussed in a previous edition of Boardroom Brief. The practical message is clear: where company failures are accompanied by serious governance issues, including poor record-keeping, missed tax lodgements and failure to cooperate with liquidators, ASIC may seek the maximum five-year disqualification period.
Over the Horizon
From shipping lanes to funding lines: the next phase of the Middle East shock
The Middle East conflict, covered in recent editions of Boardroom Brief, has now entered its eleventh week, with the fragile US-Iran ceasefire barely holding and the effective closure of the Strait of Hormuz disrupting around one-fifth of global oil and gas flows. Brent crude surged 51% in March and has recently traded above USD100 per barrel, with Australia acutely exposed given it imports around 90% of its refined liquid fuels. The macroeconomic flow-through is now visible with the Reserve Bank of Australia raising the cash rate to 4.35% on 6 May 2026. Corporate impacts are crystallising with Qantas warning that its second-half jet fuel bill could be up to $800 million higher than previously forecast, deferring a planned $150 million share buyback, while ANZ has lifted credit provisions to their highest level since the COVID-19 pandemic. As we unpacked in our recent insight, the cost pressures resulting from the conflict are increasing the risk of financial distress and insolvency for Australian businesses. Mining, agriculture, logistics and transport, tourism and construction are among the sectors most exposed. ASIC’s 2026 enforcement priorities include insolvency-related misconduct, and ATO debt recovery has intensified, with more than 84,000 Director Penalty Notices issued in FY2024–2025 (a 136% increase on the prior year).
Directors should treat this as a prompt to take preventative steps now and have a ‘distress readiness kit’ prepared to be deployed, which might include:
- (i) weekly cash-flow and liquidity reporting
- (ii) stress-testing the impact of sustained higher fuel, freight and financing costs
- (iii) identifying critical supplier, customer and counterparty exposures
- (iv) engaging early with lenders, landlords, key suppliers and the ATO.
If solvency pressure is emerging, Directors should consider obtaining restructuring advice early, including on whether safe harbour protection under section 588GA of the Corporations Act 2001 (Cth) may be available, which can be accessed confidentially and before insolvency occurs.