Welcome to Edition 71 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.


Corporate Culture in the spotlight.  The Hayne Royal Commission is ensuring that the issue of “corporate culture” remains in the spotlight, aided by the ASX Corporate Governance Council which plans to introduce recommendations strengthening disclosure and compliance obligations in this space.  However, Directors should note that it is not only financial services companies for whom the issue of corporate culture is relevant. In “The way we do things around here” – corporate culture in the energy and resources sector, we note that culture within energy and resources companies is also frequently questioned, particularly in times of crisis.

Treasury publishes discussion paper on modernising business registry services.  On 13 July 2018, Treasury published a discussion paper on its proposals for enhancing the Australian Business Register and the ASIC business register in response to user experience feedback from stakeholders.  In particular, the proposals are intended to address the high compliance costs and regulatory burden as well as issues around data integrity and legislative restrictions on ASIC’s ability to interact with clients associated with the existing services.  Directors should note that, among the suggested solutions for improving user experience, is the implementation of Director Identification Numbers.  Submissions can be made to Treasury until 17 August 2018.

ASX releases Compliance Update.  On 12 July 2018, ASX released Compliance Update no 06/18.  The Update confirms postponement until 6 August 2018 of the ‘go-live’ date for entities being able to lodge price-sensitivity and cross-released announcements on ASX online and confirms updates to ASX Guidance Note 1 and Guidance Note 4 (as reported in last week’s Boardroom Brief).  Directors should also note ASX’s reminder of upcoming periodic reporting deadlines for preliminary final reports, statutory half year financial reports, statutory audited annual accounts and annual reports.

Takeovers Panel publishes updated Guidance Note 1 on unacceptable circumstances.  On 13 July 2018, the Takeovers Panel published its final revised Guidance Note 1 Unacceptable Circumstances.  In finalising its guidance, the Panel considered respondents’ submissions in relation to: (i) the uncertainty in the market regarding how long a last and final statement will be treated as having ongoing effect following the close of a bid; (ii) unintended consequences to the proposed guidance; (iii) the appropriateness of a four month wait period; and (iv) general exceptions during the wait period.  Specifically, the updated Note includes an example of unacceptable circumstances when a bidder makes a no increase statement and subsequently makes a new bid with increased consideration.  See the Panel’s media release and public consultation response statement for more information.


US-China trade war intensifies further.  On 6 July 2018, US tariffs impacting $US34 billion worth of Chinese goods came into effect.  In response to China’s retaliatory tariffs on US goods, US President Donald Trump announced last week that the US will hit back with a 25% tariff on a further $US200 billion worth of Chinese goods (with $US16 billion worth of Chinese goods to possibly be affected during the course of the next two weeks).  This shows that President Donald Trump is willing to follow through with his pledge to meet Chinese retaliation with an equal response.  As the trade war intensifies between two of our key trade partners, we can expect the Australian economy to suffer — the Australian dollar having already fallen to 73.8 US cents on 13 July 2018.

Non-mining infrastructure sector expected to drive Australian economic growth.  Interesting analysis from Westpac last week points to the non-mining infrastructure construction sector (including both public and private projects) as a key growth driver of the Australian economy for 2018–19.  Westpac notes that following an extensive period of under-investment, Australian states have shown a greater appetite for using their existing balance sheets to assist with infrastructure project funding, as reflected in the most recent annual state budgets (see chart below).

(source: Westpac Australia & NZ Weekly)

Already in March this year, infrastructure activity was valued at $16.5 billion, representing 3.8% of the economy and eclipsing new home building activity (valued at $16.2 billion for the same month).  The pressing need for infrastructure investment has been compounded by the unforeseen growth in Australia’s population, particularly in Sydney and Melbourne.  Infrastructure activity is therefore expected to gain further momentum in the coming months.