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The Department of Home Affairs has issued its draft guidance “Modern Slavery Act 2018: Draft Guidance for Reporting Entities” (Draft Guidance) for the new Modern Slavery Act 2018 (Cth) (the Act).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 76 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.
AICD report shines spotlight on diversity beyond the ASX 200. On 16 August 2018, the Australian Institute of Company Directors (AICD) published a report examining for the first time the state of gender diversity on ASX 201-500 companies. Key findings from the Report included: (i) female representation on boards greatly declines beyond the ASX 200, falling from 27.9% across the ASX 200 to 15.8% across ASX 201-500 companies; (ii) newer companies are more likely to have greater gender diversity; and (iii) female representation rises to 22.9% on ASX 201-500 boards chaired by an ASX200 Chair. According to the AICD, 30% female board representation is the tipping point where the true benefits of gender diversity are gained irrespective of whether the company is a large, mid or small-cap company. The Report indicates that there are larger obstacles to achieving greater gender diversity among companies outside the ASX 200, typically because of smaller board sizes and a greater presence of founders and investors. Directors should note that this push for greater board diversity reflects the growing consensus that a diverse board delivers better outcomes for shareholders. For more, see the AICD’s press release.
Government consults on reforms to combat ‘phoenixing’ by directors. On 16 August 2018, Treasury published exposure draft legislation and explanatory materials on phoenixing; being when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts to creditors. This follows the Government’s establishment last month of a new confidential ‘Phoenix Hotline’ to encourage the general public to report concerns of such activity. The proposals include: (i) introducing offences that target those who conduct and facilitate illegal phoenix transactions; (ii) preventing directors from backdating their resignations to avoid personal liability; (iii) preventing a sole director from resigning and leaving a company as an empty corporate shell; (iv) extending the director penalty provisions to make directors personally liable for their company’s GST; (v) expanding the ATO’s power to retain refunds where there are tax lodgments outstanding; and (vi) restricting the voting rights of related creditors of the phoenix operator at meetings regarding the appointment, removal or replacement of an external administrator. Submissions can be made until 27 September 2018.
Government consults on Consumer Data Right. On 15 August 2018, Treasury published exposure draft legislation and explanatory materials which will implement the Consumer Data Right (CDR). The CDR will allow consumers to harness the power of their data and provide consumers with greater control over their data. The plan is to implement the CDR in the banking, energy and telecommunications sectors before rolling out across all sectors of the economy. Entities will need to be accredited before they can receive consumer data and strict privacy safeguards will apply to data transfers. The proposed approach to privacy requirements appears to go further than the Government previously recommended and there will no doubt be concerns as to how to efficiently implement and manage a multi-tiered privacy compliance regime (ie, managing compliance under the Privacy Act with compliance under the new privacy safeguards). Submissions can be made until 7 September 2018. See also G+T insight, ‘Consumer Data Right Bill’.
National Energy Guarantee policy (NEG) secures party room victory. At a coalition party room meeting last Tuesday, ministers agreed to initiate a one-month consultation on state-required legislation to implement changes to the national energy market rules. Unfortunately this became the spark that ignited a concerted push by opponents of the policy which, at the time of writing, had resulted in the Government postponing indefinitely plans to legislate the emissions reduction target for the NEG and flagging a raft of new regulatory provisions aimed at lowering power prices. As noted in last week’s Boardroom Brief, this critical area of national economic policy is in a state of rapid change, which presents significant challenges for Directors of “power exposed” businesses: both consumers and (increasingly as a result of the proposed new regulatory regime) producers.