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 ASIC’s enforcement update for the second half of 2020, the Australian Shareholders’ Association’s focus areas, a Federal Court ruling on a director’s right to privileged company information and consultation on offshore petroleum legislative amendments. We also consider the impact of the Labour Force data on the stock market.


ASIC publishes enforcement update for the H2 2020. ASIC has published its Enforcement Update for the period from July to December 2020, which provides a high-level overview of ASIC’s enforcement work undertaken during this time and its enforcement priorities moving forward. Looking back on H2 2020, ASIC recorded 12 market-related enforcement results with respect to misconduct in relation to continuous disclosure, insider trading and emerging misconduct (such as through cyber crime or cryptocurrency). In addition, ASIC recorded one corporate governance-related enforcement result in relation to directors’ duties. In summarising its role during this period, ASIC notes that this period saw a record high of ASIC penalties imposed, which it emphasises sends a clear message to all industries that consumers must be treated fairly, and misconduct that results in significant consumer harm will be strongly punished.  ASIC confirms that it will continue to act against any such misconduct which threatens the integrity of Australia’s financial system and markets.  Notably, a key priority for ASIC will be pursuing matters which attempt to exploit the pandemic environment, or which hinder recovery from the pandemic. In pursuing these matters, ASIC seeks to address conduct which is considered opportunistic (including by way of market announcements) and failures to disclose materially negative information.  In light of this enforcement update, companies can expect that ASIC’s heightened investigatory role will continue throughout 2021.

The Australian Shareholders’ Association announces focus areas. It may seem like the AGM season has just finished, but Directors will soon be turning their minds to the looming end of a most unusual financial year. Of note, the Australian Shareholders’ Association (ASA) has announced the focus areas which will guide its company monitoring and voting intentions at 2021 AGMs.  These focus areas include directors and boards (in particular, that boards should comprise directors with diverse skills and a meaningful board skills matrix), remuneration and performance (in particular, assessment of the impact of COVID-19 on companies and their executive remuneration), risk management (noting the ASA expects directors to identify, manage and communicate financial, cybersecurity and non-financial risks including ESG risks) and shareholder communication and fairness in capital raisings (in particular, that retail investors are treated proportionately and fairly when compared with institutional investors). Given the rise in shareholder activism in recent years, boards should be comfortable that they are able to meet investor expectations in these focus areas, as they are likely to be an area of scrutiny – not just for the ASA, but for shareholders more generally.  See the ASA’s media release.


A director’s right (or lack of) to access privileged company information. The Federal Court of Australia has considered the extent to which the immunity from an obligation to produce or disclose information on the basis of legal professional privilege can be maintained by a company against a current director. In Hammond v Quayeyeware Pty Ltd [2021] FCA 293, a director sought relief which would have allowed her access to certain company documents under sections 290 and 1303 of the Corporations Act, including legal advice obtained by a sub-committee of the board which related to a dispute between the company and the director, which the company claimed was subject to legal professional privilege. The Court declined the application for relief and held that the company was entitled to withhold the privileged information from the director, finding relevantly that directors' rights of access do not override a company's right to maintain legal professional privilege immunity against a director in respect of confidential advice to the company relating to a dispute between the company and a director.

Consultation on proposed amendments to the OPGGSA 2006. The Department of Industry, Science, Energy and Resources (DISER) is seeking feedback on proposed amendments to the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) (OPGGSA 2006) contained in the Offshore Petroleum and Greenhouse Gas Storage Amendment (Titles Administration and Other Measures) Bill 2021 exposure draft by 23 April 2021. The draft bill proposes changes intended to strengthen Australia's offshore oil and gas regulatory framework and incorporates recommendations from the independent review into the circumstances leading to the administration and liquidation of Northern Oil and Gas Australia. See DISER’s consultation page.


A revived labour market and stock market. Last week, the Australian Bureau of Statistics reported the national economy had created over 70,000 new jobs in March 2021 alone. This has resulted in a decrease in the monthly unemployment rate to 5.6% (which is also an improvement on the rate’s forecasts). With this good news seems to be positive investor sentiment, with the Australian stock market extending its 50% rise since March 2020, notwishtanding the looming end of the JobKeeper wage subsidy. Australia’s pandemic response and low rates of community transmission continue to be the envy of the world.

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