In this edition, we discuss the joint statement by the Australian Sustainable Finance Institute (ASFI) and five other peak investment bodies examining why investors rely on climate disclosures, and the Australian Securities and Investments Commission’s (ASIC) collection of a further $4.36 million in penalties from 22 large proprietary companies that allegedly failed to lodge their financial reports on time. We also examine the Full Federal Court’s decision upholding $11 million in penalties against Southern Cross Payments Ltd (formerly iSignthis Ltd) (Southern Cross) and its former managing director and chief executive officer, Mr Nickolas Karantzis, for disclosure failures and breaches of directors’ duties.
In Over the Horizon, we look at the Commonwealth Bank of Australia’s (CBA) analysis of the US midterm elections, and what a change of power in Washington may mean for Australian boards.
Governance
Investors say climate disclosure is a test of board oversight.
On 2 November 2026, ASFI, the Australian Council of Superannuation Investors (ACSI) and other peak finance and investment bodies issued a joint statement calling for transparent, comparable climate disclosure. The statement notes that investors, lenders and insurers rely on these disclosures to inform valuation, lending and underwriting decisions, and to test how resilient a business is under different scenarios. ACSI Chief Executive Ms Louise Davidson said good climate disclosure reveals “the extent to which boards are engaging with material risks and opportunities, and how they are being factored into strategy, capital allocation and long-term resilience”. The bodies also called for the framework to be kept stable and certain so that its benefits can grow. Separately, the Treasury has consulted on raising the size thresholds that determine which proprietary companies must prepare financial and sustainability reports, with the changes proposed to apply from financial years starting on or after 1 July 2027. Current obligations continue to apply until then. Directors should note that investor groups are continuing to push for progress in climate-related disclosures. Boards should be able to show how climate risks feed into strategy and capital allocation, and should be satisfied that disclosures are consistent with the financial report and supported by reliable data.
Regulatory
ASIC collects over $4.36 million from 22 companies over late financial reports.
On 4 November 2026, ASIC announced that 22 large proprietary companies had paid infringement notices of $198,000 each (a total of $4.36 million) in relation to financial reporting matters. Paying an infringement notice is not an admission of guilt or liability, and ASIC's investigation continues where reports remain outstanding. ASIC has now collected more than $13.7 million from 70 infringement notices since August 2025, and 193 of the 234 companies it contacted in 2026 had allegedly not lodged their 2025 reports. The most common reasons were audit-related issues, administrative oversight and inadequate resources, and some companies did not know about the obligation until ASIC contacted them. Large proprietary companies generally have four months after the end of the financial year to lodge. Directors should keep in mind that ASIC holds them accountable for lodging on-time, expects them not to wait for ASIC to step in, and has said it will continue this surveillance into 2027. Directors should regularly review their company’s lodgement obligations and deadlines, particularly after changes in size, structure, ownership or operations, and make sure that audit timetables and finance resources are sufficient to meet the deadline.
Legal
Federal Court upholds $11 million in penalties against Southern Cross and its former CEO.
On 2 November 2026, the Full Federal Court largely dismissed appeals by Southern Cross and Mr Karantzis, its former managing director and chief executive officer. The Court upheld orders that Southern Cross pay a $10 million penalty for breaching disclosure laws and that Mr Karantzis pay a $1 million penalty and be disqualified from managing corporations for six years. He had been found to have breached his directors' duties and failed to ensure that information given to the ASX was not false or misleading. The appeal succeeded only on a correction to the wording of one declaration, which did not change any liability or penalty outcome. In upholding the company’s penalty, the Court said that the harm “to the integrity and proper operation of the market and was not confined to demonstrated financial loss suffered by an identified shareholder”. The decision follows the four-year disqualification of the former chief executive of Regional Express Holdings Limited on 20 October 2026 over a profit forecast with no reasonable grounds, covered in our 26 October edition of Boardroom Brief. Directors should keep in mind that courts will penalise disclosure failures even where no shareholder can show a loss. Boards should ensure market announcements are properly verified and that no single executive controls what is released to the ASX without board scrutiny.
Over the Horizon
US midterms: new balance of power, but no more certainty.
On 5 November 2026, CBA released analysis of the US midterm elections, in which the Democrats won control of both houses of Congress, with the new Congress taking office in January. CBA expects the result to make it harder for the Trump administration to pass major new spending measures, but warns that President Trump may lean harder on presidential powers over tariffs, sanctions, export controls and foreign policy. As CBA Senior Geo-Economics Analyst Madison Cartwright put it, “Markets and businesses should not equate congressional gridlock with policy calm. Policy is likely to become less predictable rather than more moderate.” While Australia's direct exposure to US tariffs remains relatively contained, shifts in US trade policy could reach Australian businesses indirectly through major trading partners such as China. Movements in US government bond yields, which fell by about 7 to 8 basis points after the result, could also flow through to Australian markets and borrowing costs, although CBA cautioned that the initial reaction was “a little knee-jerk”.
Directors should keep in mind that divided government in the US is unlikely to mean less uncertainty, and should ask management to stress-test strategy, capital plans and major investments against a range of US policy scenarios, identify the triggers for a change of course and consider how quickly the business could respond.