Welcome to Edition 136 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.
In this Edition, we consider the Government’s new infrastructure project tax concession, ASIC’s final whistleblower policy guidance and AICD’s commentary on the need for regulation of the litigation funding market.
YOUR KEY BOARDROOM BRIEF
Infrastructure tax concessions. The Government has released a draft guidance note on implementation of a new ‘economic infrastructure staples tax concession’, which is intended to unlock via tax incentives billions of dollars of capital for infrastructure projects with an estimated capital expenditure of more than $500 million. The concession would apply to a diverse range of economic infrastructure projects in the transport, energy, communications and water sectors. In broad terms, the instrument provides certain withholding tax concessions to stapled instruments (eg, trust units and shares) in certain infrastructure owning vehicles.
ASIC releases its final guidance for whistleblower policies. On 13 November 2019, ASX released its response to its consultation on proposed guidance on the new obligation for public companies, large proprietary companies and corporate trustees of superannuation entities to implement a whistleblower policy by 1 January 2020 (noting ASIC has granted relief for not-for-profits or charities with annual revenue of less than $1 million). 40 submissions were received; broadly supportive of the proposals. The final guidance, Regulatory Guide 270, covers matters that must be addressed by the whistleblower policy as well as good practice tips on establishing, implementing and maintaining a policy. Given the wide applicability of the new rules and potential sanctions for non-compliance, Directors of all companies subject to them should see a whistleblower policy and training to officers and employees as a tool for mitigating risk. See ASIC’s media release.
AICD supports regulatory regime for class action funders. The AICD’s statement, supporting calls to regulate the litigation funding market, notes that the recent TPT Patrol v Myer decision (click here for a summary) has given rise to concerns about a potential increase in the number of securities class cases brought against Australian companies. The AICD also supports calls for the Government to hold a separate inquiry into Australia’s continuous disclosure regime, as was recommended by the ALRC inquiry into class actions in January this year. The AICD highlights that 45% of all securities class actions ever initiated in Australia are currently on foot, illustrating the spike over recent years, and the related significant deterioration in the directors and officers insurance market.
THE WEEK AHEAD
ASX listing rule reforms – are you ready? The comprehensive changes to the ASX Listing Rules take effect on 1 December 2019. See G+T’s “ASX Listing Rule Changes: What you need to know” for our guide on the changes that will most affect your business.
Government’s AI roadmap. Last week a 60-page artificial intelligence roadmap set out the focus areas for placing Australia at the forefront of AI-based innovations, indicating that 161,000 AI specialists will be needed to meet demand by 2030. Meanwhile, senior executives, including CTO of technology giant IBM and CEO of Woodside, have publicly urged Australian business leaders to plan for significant changes to their organisations and workforce for the AI era.