YOUR KEY BOARDROOM BRIEF
The typical first-time ASX 200 board appointee. A report released by EY — following a survey of first-time ASX 200 board appointees in 2018, chairs who had made such appointments and ASX 200 search consultants — revealed that the pathways to directorship among men and women were similar. While there is a trend towards greater involvement of search consultants in the recruitment process to help boards diversify, female appointees commented that women need to be intentional in their networking as considerably more men are in the CEO and senior P&L roles which afford higher visibility for directorship roles. On a positive note, though, and as per last week’s report on the narrow demographic of most Australian CEOs, more companies are warming up to looking further afield to ensure they source the best talent. This latest report suggests directors focus on establishing a larger pool of senior female executives and CEOs from which NED directors can then be drawn.
‘Large proprietary company’ thresholds to double. Government promised to cut red tape for small and medium sized businesses — from 1 July 2019, a company will be a large proprietary company if it meets two of the following:
- $50 million or more in consolidated revenue (increased from $25 million);
- $25 million or more in consolidated gross assets (increased from $12.5 million); or
- 100 or more employees (increased from 50 employees).
The new whistleblower policy requirement is another reason to welcome the change, as it will only apply to public and large proprietary companies. Directors of small and medium-sized companies should note, however, the new (and onerous) whistleblower rules (also coming into force on 1 July 2019) will still apply to them – and given the wide applicability of those new rules and potential adverse consequences for non-compliance, a whistleblower policy (in conjunction with appropriate training to officers and employees) can be a useful tool for mitigating what should now be regarded as a key business risk. Click here for more on the new whistleblower regime.
Hayne, ASIC, banks, penalties and the price of shifting risk. ASIC chairman James Shipton’s recent speech at the ASIC Annual Forum 2019 underlined ASIC’s pursuit of litigation as a default and the fact that it is now armed with exponentially higher potential penalties and a lower bar to pursue those outcomes. G+T partner Richard Harris’ article on the impact of the Hayne Commission’s preoccupation with banking mistakes might be of interest to Directors alarmed by rising compliance costs within their organisations. In a world where corporates respond to risk by either putting a price on it or removing it, a materially increased risk environment can have profound unintended consequences for the economy and scupper deals.
THE WEEK AHEAD
Scott Morrison names new Ministry. Prime Minister Scott Morrison has moved to quickly stamp his authority on the new Government with Cabinet appointments favouring supporters, a small shuffle in portfolio responsibilities to reunite energy and climate change and separate the NDIS from welfare, and otherwise maintain continuity where possible. You can view the full list of ministerial appointments here.
Brexit update. The UK has voted in the European Parliamentary elections, two months after it was originally due to leave the EU. The results, which have been trickling through since this morning, show as expected that the Conservative Party has performed poorly — partly explaining Theresa May’s decision to step down as Prime Minister on Friday. In contrast the Brexit Party and Liberal Democrats appear to be performing well (and in a reflection of the Australian Federal poll, the Brexit Party is performing particularly well in every region outside London). Now begins the potentially lengthy process for the Conservatives to choose a successor, leaving markets in limbo once again.