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 the ALRC’s recommendations to promote judicial impartiality and public confidence in the judiciary, the GIA’s guide for boards on digital literacy and the Takeovers Panel’s decision to decline to conduct proceedings in relation to the affairs of Firetail Resources Limited.
In Over the Horizon, we consider new US legislation which gives Australia significant opportunity to develop a billion-dollar onshore processing market for critical minerals.
GOVERNANCE & REGULATION
ALRC’s recommendations to promote and protect judicial impartiality and public confidence in the Commonwealth judiciary. Earlier this month, the Australian Law Reform Commission’s (ALRC) report ‘Without Fear or Favour: Judicial Impartiality and the Law on Bias (ALRC Report 138)’ was tabled in Parliament. The ALRC was asked to consider whether any reforms to the law relating to judicial impartiality and bias are necessary, including: (1) whether the current framework is appropriate to maintain public confidence in the administration of justice, (2) whether the framework provides sufficient clarity to officials, the legal profession and the community as to how to manage potential conflicts or perceptions of impartiality, and (3) whether current mechanisms in place for raising allegations of bias, and deciding those allegations are sufficient, including in the context of review and appeal mechanisms. The ALRC concluded that it is not necessary to amend the current body of law, but reflected on the need for greater awareness, transparency and consistency surrounding the existence and application of policies dealing with potential conflicts and bias. See report.
GIA’s Guide for Boards on digital literacy. The Governance Institute of Australia (GIA) has released a report outlining the core issues that Boards face in relation to digital literacy and provides guidance as to how directors can successfully navigate the ever-evolving digital revolution. In May 2022, the GIA surveyed 481 directors, company secretaries and other senior governance and risk professionals to inform its report. The results gave rise to some concerns, with 46% of respondents rating their organisation as ‘average’ or ‘poor’ in relation to data management and 41% stating that less than 25% of their board members have technology skills as part of their core skill set. However, 93% of respondents believed that the Board should be involved in technology issues. This reflects a clear need for technology skills, but a big shortfall of such skills on Boards at present. GIA Chair Paulin Vamos noted that Boards must prioritise digital competency ‘as a matter of urgency or risk their organisation becoming obsolete.’ The guidelines in the report can aid Boards to increase their digital literacy. See media release.
Takeovers Panel declines to conduct proceedings in relation to the affairs of Firetail Resources Limited. In a previous edition of Boardroom Brief, we discussed an application made by Firetail Resources Limited (Firetail) in relation to its own affairs. Firetail’s application related to the status of notices received under section 203D and 249D of the Corporations Act 2001 (Cth) (Corporations Act) requisitioning a general meeting to consider resolutions to remove two directors, appoint a substitute director, and remove any other directors appointed between 18 July 2022 and the date of the meeting. Firetail had submitted that a group of shareholders were acting in concert to influence the composition of the Board, that the identity of a substantial shareholder had not been disclosed, and that the Corporations Act had therefore been contravened. The Panel has declined to conduct proceedings on the basis that Firetail failed to provide sufficient material to justify the Panel making further enquiries. The Panel did note that it remains open for Firetail or ASIC to make a further application to the Panel in relation to tracing notices that have since been issued regarding the shareholdings of certain banking institutions. The Panel will publish its reasons for decision in due course. See media release.
OVER THE HORIZON
Australia’s next mining and manufacturing boom? US President Joe Biden has signed new legislation, the Inflation Reduction Act, which gives countries with a free-trade agreement with the US preferred status to supply processed critical minerals for the US electric vehicle battery program. The legislation requires that 40% of the value of critical minerals used for electric vehicle batteries must be sourced from a country with a free trade agreement with the US, such as Australia. That proportion grows to 80% in 2027. Australia could be one of the key beneficiaries of the legislation, given its abundance of critical minerals and desire to break into the onshore processing market. The supply of processed critical minerals represents a potential multi-billion dollar opportunity for the Australian mining and manufacturing industries.