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 ASIC’s enforcement update for the first half of 2021, the ACNC’s reminder to the “Responsible People” of charities, a NSW Court of Appeal decision emphasising the importance of the timely recording and singing of meeting minutes and the effect of so-called “bifurcating” conditions in bidder’s statements.  We also consider the key takeaways of APRA’s paper on Climate Vulnerability Assessment as it relates to the financial risks of climate change all companies should be aware of.


ASIC releases enforcement update for the first half of 2021. On 10 September 2021, ASIC released its Enforcement Update for January to June 2021. During this period, ASIC recorded $29.6 million in civil penalties imposed by Courts, 133 people or companies were prosecuted for strict liability offences and 19 people were disqualified or removed as directors.  ASIC concluded 17 market-related enforcement matters during this period relating to continuous disclosure, market manipulation and insider trading.  ASIC also concluded 20 corporate governance enforcement matters relating to directors’ duties and governance failures and auditor misconduct. See ASIC’s media release.  As noted in previous editions of Boardroom Brief, we expect ASIC enforcement activities to ramp up in 2022, although there are signs it may begin to take a somewhat more pragmatic approach than the “why not litigate” mantra adopted under ASIC’s prior leadership. See G+T’s analysis of ASIC’s new approach to regulation and enforcement.

ACNC Commissioner reminds of expectations for directors, trustees and boards of charities.  The ACNC Commissioner has reminded of the ACNC’s expectation that a charity’s “Responsible People” (being its directors, trustees, Board and committee members) are each fully across the content of their charity’s Annual Information Statements.  See the ACNC’s media release.


NSW Court of Appeal emphasises the timely recording and signing of minutes. The NSW Court of Appeal in Mualim v Dzelme [2021] NSWCA 199 reinforced the significance of timely record keeping by Directors and company secretaries. The Court endorsed the view that provisions of the Corporations Act providing evidentiary value to minutes will only be enlivened where there is adherence to the strict timeframes for recording and signing minutes. This decision serves as a reminder for Directors and company secretaries to ensure minutes are stored in the company’s minute book within a month of the relevant meeting and are signed by the Chair (or sole director) within a reasonable time following the meeting. 

Court clarifies effect of so-called “bifurcated” defeating conditions in a Bidder’s Statement. In Keybridge Capital Ltd v WAM Active Ltd [2021] NSWCA 203 the NSW Court of Appeal considered a bifurcating clause in WAM’s Bidder’s Statement in relation to its takeover bid for Keybridge Capital Limited.  These clauses are sometimes to use to split, or bifurcate, defeating conditions in takeovers, which are routinely used to provide protection to the bidder against adverse (from the bidder’s perspective) developments in relation to the target. In Keybridge, the effect was to “split” a placement from a “prescribed occurrence” condition, creating a new, stand-alone, condition in relation to the placement.  The Court held that this defeating condition question remained a defeating condition after it had been triggered, and, as it related to a “prescribed occurrence” in s652C of the Corporations Act, could be waived at any time prior to the end of the offer period.  As this case demonstrates, the takeovers provisions are highly technical in their application but also offer scope for innovation: the Court’s view was counter to the preferred view of both ASIC and the Takeovers Panel in Re Keybridge Capital 02, 05 and 06 [2020] ATP 6.  


APRA publishes information paper on the financial system’s climate vulnerability. Recent months have seen a number of regulators and commentators emphasising the importance of Directors considering the risks posed by climate change from an ESG perspective, and now APRA has published an information paper in relation to its Climate Vulnerability Assessment (CVA) which reminds of the financial risks posed by climate change. The CVA is an initiative developed by APRA in consultation with Australia’s five largest banks, the Australian Banking Association, and other agencies on the Council of Financial Regulators. The CVA intends to identify key areas of financial exposure in relation to financial institutions, the financial system, and the economy to the risks which climate change poses. APRA’s information paper observes that climate change is a financial risk, and that companies need to constantly consider where, how and to what extent the financial risks associated with climate change will impact their business. The information paper prompts Directors to consider the physical, transition and liability risks posed by climate change and their impact on the company’s income statement, cash flow statement and balance sheet. Directors should consider the CVA alongside APRA's draft Prudential Practice Guide CPG 229 on Climate Change Financial Risks to gain an understanding of the financial risks associated with climate change and how these risks might play out. See APRA’s media release.

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