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 discuss the consultation paper released by the Department of the Treasury on the token mapping stage of crypto asset regulatory reform, and ASIC’s reminder to directors to adequately disclose material business risks in annual reports.  Further, we look at the release of a legal opinion on directors’ liability in relation to the draft ISSB climate disclosure standards, and the application received by the Takeovers Panel in relation to the affairs of The Market Herald Limited.

In Over the Horizon, we consider whether the rejection of Central Queensland Coal Pty Ltd’s proposed coal mine signals the end of new fossil fuel projects in Australia.


Treasury releases consultation paper on the token mapping stage of crypto asset regulatory reform.  On 3 February 2023, the Australian Government Department of the Treasury (Treasury) released a consultation paper on “token mapping”.  Token mapping is “the process of identifying key activities and functions of products in the crypto ecosystem and mapping them against existing regulatory frameworks”.  The Government previously announced on 22 August 2022 that token mapping would be a foundational step in its reform agenda aimed at developing appropriate regulatory oversight of the crypto sector.  Submissions on the consultation paper are open until 3 March 2023.  These submissions will help the Government in formulating a framework for understanding crypto tokens that will ultimately inform future policy choices on licencing and custody, and potential amendments to the existing financial services frameworks.  See Treasury media release.

ASIC reminds directors to adequately disclose material business risks in annual reports.  On 10 February 2023, the Australian Securities and Investments Commission (ASIC) issued a media release reminding company directors to ensure that material business risks are adequately disclosed in annual reports, with the aim of better informing shareholders and prospective investors.  ASIC’s ongoing financial reporting surveillance program and subsequent inquiries have led to nine entities providing additional disclosure of material business risks since October 2022.  These disclosures were provided in response to ASIC’s concerns that material business risks were not sufficiently disclosed in the operating and financial review of the directors’ report.  ASIC Commissioner Danielle Press stated that “[d]irectors must provide investors with useful and meaningful information about the impact on current and future performance of changing and uncertain market conditions”.  See ASIC media release.  With an increasing regulatory focus on governance around non-financial risks, directors are reminded to ensure that the operational and financial review section of the directors’ report is subject to the same rigour and scrutiny as the financial accounts.

Legal opinion published on directors’ liability in relation to draft ISSB climate disclosure standards.  On 6 February 2023, the Australian Council of Superannuation Investors (ACSI) announced the publication of a legal opinion (Opinion) by barristers Sebastian Hartford-Davis and Kellie Dyon advising on certain questions in relation to the draft standards on climate disclosure published by the International Sustainability Standards Board (ISSB).  The Opinion concludes that the draft ISSB standards require disclosure of material information about sustainability risks that is broadly consistent with existing requirements for listed companies.  Further, it states that directors will not face liability in relation to forward-looking disclosure (including as a result of the operation of section 769C of the Corporations Act 2001 (Cth) (Act), which places an evidentiary burden on the maker of a representation on future matters to establish a reasonable basis for that representation) merely because their assessment turns out to be incorrect later.  Finally, it concludes that a “safe harbour” is not required or desirable, as it would remove the incentive to improve and avoid substandard disclosure practices. Mr Hartford-Davis previously co-authored the landmark ‘Hutley Opinions’ with Mr Noel Hutley SC, which confirmed that directors have duties to consider and manage climate risks under Australian law.  As a result, this opinion is likely to be highly influential and is expected to influence policy and stakeholder responses in relation to the introduction of mandatory climate-related financial risk disclosure in Australia (see G+T Knowledge article).  See ACSI media release. Directors should note that Australian Institute of Company Directors (AICD) has previously raised concerns regarding the interaction between section 769C of the Act and the new ISSB standards – this latest opinion would seem to be at odds with the AICD’s stance.    


Takeovers Panel receives application in relation to the affairs of The Market Herald Limited.  On 7 February 2023, the Takeovers Panel (Panel) received an application from UIL Limited (UIL) in relation to the affairs of The Market Herald Limited (TMH).  The application relates to a fully underwritten renounceable entitlement offer announced by TMH on 24 January 2023 to raise approximately $15.52 million on the basis of one new share for every six shares held (Entitlement Offer).  UIL submits that (among other things) the entitlement offer booklet lodged on 2 February 2023 in relation to the Entitlement Offer is materially misleading and/or deceptive because it contains misleading statements on the effect of the sub-underwriting, the allocation of the shortfall and the voting power of related party sub-underwriters, because it fails to disclose the association between two of TMH’s substantial shareholders, and because it fails to disclose the effect of the Entitlement Offer on the control of TMH.  The Panel subsequently announced on 10 February 2023 that it had decided not to grant an interim order sought by UIL to suspend the Entitlement Offer.  No decision has been made by the Panel whether to conduct proceedings.  See Takeovers Panel media release and subsequent media release.


Coal mine rejection – the end of new fossil fuel projects?  On 8 February 2023, The Hon Tanya Plibersek, Federal Minister for the Environment and Water (Minister), published the reasons for her decision to refuse approval under the Environmental Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) for Central Queensland Coal Pty Ltd (a wholly owned subsidiary of Clive Palmer’s Mineralogy Pty Ltd) to construct and operate an open-cut coal mine in central Queensland.  Public submissions in relation to the Minister’s proposed decision, which was announced in August 2022, argued that (among other things) approving the project would contribute to climate change and would be contrary to Australia’s 2050 Net Zero Plan, and that no new coal mines should be approved under the EPBC Act.  The Minister noted that the Great Barrier Reef World Heritage Area is located approximately 10km downstream of the proposed project area, and gave considerable weight to submissions that the project would result in “material harm” and “significant and irreversible damage” to the Great Barrier Reef.  Ultimately, the Minister considered that “the risks to the Great Barrier Reef, freshwater creeks and groundwater are too great”.  This decision marks the first time that Federal legislation has been used to reject a coal mine, and has sparked widespread speculation that proposals for numerous other fossil fuel projects may be in danger of being rejected.  The Minister responded to these comments stating that “every decision before [the Minister] … has to be decided on its merits”.  All eyes are on the Federal Government as it balances short-term energy security through further investment in fossil fuel projects against building renewable energy capacity as Australia aims to become a globally significant player in the emerging clean energy market.

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