Welcome to Edition 126 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 Treasury’s Corporate Plan 2019-20, ASIC’s Market Liaison Meeting, ASX’s monthly activity report, RBA’s decision to hold the official cash rate and TPG’s court challenge to ACCC's approach to merger approvals.



Treasury releases Corporate Plan 2019-20. The Treasury’s Corporate Plan, released on 5 September 2019, sets out Treasury’s purpose, operating context and priorities for the next four years. Key priorities include: (i) delivering the Government’s reform commitments made in response to the Hayne Royal Commission findings; (ii) overseeing the Government’s multi-pronged approach to targeting the black economy; (ii) strengthening relationships with private sector, non-government organisations, academia and other policy-focused institutions to inform policy advice; and (iv) influencing international tax policy debate and development through engagement with international forums, including the OECD and G20. See Treasury’s media release.

ASIC’s key focus areas reiterated at Market Liaison Meeting. At ASIC’s quarterly Market Liaison Meeting on 27 August 2019, top priorities included: (i) addressing deficiencies in climate change risk disclosure (click here for our summary of recent key developments in this area); (ii) improving audit quality; (iii) the Corporate Governance Taskforce’s review of ASX listed entities’ governance practices and role of the board and officers in overseeing non-financial risk and granting and vesting of equity incentives for executives; (iv) embedding a culture of accountability within organisations; and (v) ASIC’s enhanced surveillance activities. ASIC’s latest market cleanliness report, released last month, was also discussed (click here for our summary of the report) and its new product intervention power (click here for our summary of the recent consultation). As Directors prepare to enter the AGM season, it is worth noting the mention of equity incentives, and we expect ASIC may begin to take a more direct interest in disclosure of, and voting on, corporate remuneration structures.

RBA holds interest rate at 1%. In line with consensus forecasts (only four economists of 31 surveyed by Bloomberg tipped another cut), the RBA decided to keep rates on hold last week on lower than expected economic growth in Australia over H1 2019, with household consumption weighed down by a protracted period of low income growth and declining housing prices. Nevertheless, the door has been left open for further cuts. See RBA governor Philip Lowe’s official statement. The Federal Government is expected to come under increasing pressure to find ways to stimulate growth within the confines of its election promise to achieve a budget surplus. Directors should note speculation about potential investment incentives in the 2020/21 budget – rumoured to already be prompting some large corporates to be delaying investment decisions to capitalise on the expected benefits.

ASX releases Activity Report for August 2019. ASX’s Group Monthly Activity Report for August 2019 notes that total capital raised during the month was $4.9 billion, up 93% on the previous corresponding period (pcp). The average number of daily trades was 36% higher than the pcp and the average daily value traded on-market was $5.5 billion, 172% higher than the pcp. Average daily options volume was up 23% on the pcp, while the value of securities held in CHESS was 4% higher. August is usually a busy month for the exchange, given earnings seasons.  Directors with plans to raise equity in the calendar year will need to ensure preparations are well underway by the end of the current quarter.


Will the ACCC’s approach to merger approvals stand up to court scrutiny? This week, the Federal Court will hear a challenge put forward by TPG against the ACCC’s decision to block the $15 billion merger with Vodafone. Specifically, whether the ACCC, in refusing the merger, was permitted to make assumptions about future market structures without considering potential competitors. Click here for our earlier Boardroom Brief on the ACCC’s decision and G+T’s analysis.