Welcome to Edition 137 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 proposals to overhaul the Australian corporate crime regime, the ACCC as a new frontier for privacy regulation and enforcement and shareholder access to proxy information.


ALRC consults on overhaul of corporate crime regime. The Australian Law Reform Commission (ALRC) has released a Discussion Paper recommending 23 proposals for reform to the Commonwealth corporate criminal law regime including a rethink of how criminal and civil penalties are used to regulate corporate conduct. The Discussion Paper covers several issues including, in particular, a proposal to divide unlawful conduct by companies into three categories – criminal offences, civil penalty proceedings and civil penalty notices. The ALRC has identified an over-proliferation of criminal offences in Commonwealth law that dilutes the rationale for criminal liability and adds significantly to regulatory complexity. The AICD has released a statement largely supportive of the ALRC’s recommendations and has welcomed its emphasis on the oversight role of the board, distinct from executive management, and the importance of targeted liability for corporate conduct. The AICD has cautioned, though, that practical implications, such as the impact on uptake of senior positions and already ballooning directors and officers’ insurance costs, warrant consideration when discussing any proposals.

ACCC – a new cop on the privacy beat? Recent ACCC enforcement action, including for example against Google, underlines its emergence as a more active and better resourced regulator than the OAIC on privacy and data collection practices of businesses. See our G+T Insight article for more analysis of the ACCC v Google case and its potential implications for businesses. Directors should ensure privacy practices are reviewed for compliance with privacy laws as well as under a broader consumer protection lens to check practices and conduct as a whole are not misleading and deceptive. 

Shareholder access rights to proxy information. A Supreme Court decision, Re Cromwell Property Securities Ltd [2019] NSWSC 1608 (Re Cromwell), denied the shareholder of an ASX-listed company access to inspect the company's proxy records ahead of its AGM on the basis that such a right arose under neither the Corporations Act nor the common law. The decision departs slightly from last month’s Federal Court decision in Sun Hung (click here for a summary) in which a shareholder was granted access to inspect the company's proxy records on the basis that it was in shareholders' interests generally to have access to proxies where the directors were using the information to solicit proxy votes. In Cromwell, the shareholder sought the proxy information to approach Cromwell security holders about its proposed candidate to: (i) the Cromwell board; and (ii) verify the validity of the proxy forms and integrity of the proxy process. In denying the request, Justice Rees noted all decisions other than Sun Hung granting access to proxy forms to "level the playing field" concerned director access, and shareholders can communicate with other security holders by circulating a statement with the meeting notice or accessing the company's register to communicate directly. The Re Cromwell case, though, did not concern use of proxy records to solicit proxies. Therefore, Directors should assume the question of a shareholder’s access right to proxy information will be fact-specific and depend on the basis on which they seek to establish it.


Trade. This week is the Thanksgiving holiday week in the United States. Talk of US / China trade tensions is likely to abate in the short term, but with less than a year until the US Presidential elections, the markets are placing increasingly large bets on the outcome of trade negotiations. This has the potential to create significant volatility across markets in the lead-up to the Christmas Break. While recently buoyed by suggestions that a modest “Phase 1” deal is close, the prospects for a comprehensive “Phase 2” (which among other things would be designed to address US concerns over misappropriation of intellectual property rights by China) appear as remote as ever.  

FIRB applications. FIRB has confirmed applications will not be processed from 12 noon (AEDT) on Thursday 24 December 2019 to 2 January 2020. FIRB has advised that applications received from this week are likely to face significant delays in processing, and this should be factored into planning for deals subject to FIRB approval.

CHESS replacement system consultation. On 15 November 2019, ASX released a consultation paper on the first of three tranches of operating rule amendments required to facilitate the implementation of the new CHESS replacement system in April 2021. The proposals relate to accounts, participants, securities and pre-settlement aspects for Day 1 CHESS replacement system functionality. Submission can be made until 17 January 2020.

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