mertons corporate snapshot - december quarter 2011
Mertons' Corporate Snapshot is intended to provide you with an overview of corporate governance matters including compliance changes, trends and other issues. Should you need further information or assistance with any of the matters raised here, or to discuss how these matters may affect your business, please contact:
Mark Licciardo
Managing Director
Level 6, 350 Collins Street
Melbourne Victoria 3000
ph: 03 8689 9997
fax: 03 9670 5942
mobile: 0419 327 725
www.mertons.com.au
OH&S Changes
The new national work health and safety (WHS) laws and regulations commenced in most states and territories on 1 January 2012. Under the new laws, the primary duty of care applies to all 'workers', that is, any person who carries out work in any capacity for a 'person conducting business or undertaking (PCBU)'. The law also:
- places obligations on a PCBU to consult with all workers;
- places a duty on officers to exercise due diligence, and creates personal accountability and liability for Directors;
- provides for increased fines & penalties;
- gives health and safety representatives broad powers;
- places duties on upstream designers, manufacturers, importers and suppliers.
New Financial Requirements for Responsible Entities
From 1 November 2012, responsible entities will have to comply with the new financial requirements, including preparation of 12-month cash flow projections, the requirement to hold a minimum Net Tangible Assets value and new liquidity requirements. The increased importance of meeting the new capital and liquidity requirements cannot be understated. Mertons can assist with preparation for compliance with the new requirements.
Not-for-Profit Sector Reform
The not-for-profit sector is undergoing extensive reform in the following key areas:
- Establishing a national regulator for the sector - the Australian Charities and Not-for-profits Commission (ACNC). From 1 July 2012, the ACNC will take over many of the functions currently undertaken by the ATO;
- Introducing a statutory definition of 'charity';
- Reforms to taxation and regulatory policy;
- Reducing red tape, including introducing a standard chart of accounts, for government funded not-for-profits. Several levels of consultation are taking place during January. Please contact Mertons for details.
Key Management Personnel (KMP) Remuneration Voting Restrictions - Update
Schedule 7 of the Consumer Credit and Corporations Legislation Amendment (Enhancements) Bill 2011 (Cth), which was introduced in September 2011, repeals subsection 250R (5) of the Corporations Act and allows for a chair of an annual general meeting who is also a member of the company's KMP (or a closely related party of KMP), to vote undirected proxies in the non-binding remuneration report vote if the shareholder, who is not a member of the KMP of the company) expressly authorised the chair to exercise the proxy. The Bill has been referred to the Senate Economics Committee for comment. For advice about how this might impact your next AGM, please contact Mertons.
CAMAC to Consider Future of Company AGMs
The Parliamentary Secretary to the Treasurer, David Bradbury, has asked the Corporations and Markets Advisory Committee (CAMAC) to consider the future of company AGMs, including:
- the way that forms and other documents for AGMs should change to meet shareholders' future needs
- the opportunities and risks brought about by advances in technology to maintain the relevance of AGMs, particularly given that paper-based casting of votes means that the results of shareholder voting are effectively determined before an AGM even starts
- the challenges faced by AGMs in the context of globalisation, particularly as increasing numbers of companies are dual-listed and have shareholders in multiple countries.
Guidance on Disclosure Policies
Listed entities are required to have a disclosure and communications policy that sets out the appropriate processes for dealing with analysts shareholders, regulatory authorities, markets, investors and the media. Mertons can assist your company in developing such a policy (or review your existing policies).
ASIC News
- ASIC has released Regulatory Guide 230 - Disclosing non-IFRS Financial Information. The Guide sets out guidance on the use of financial information in financial reports and other corporate documents, where that information is presented other than in accordance with accounting standards (non-IFRS financial information).
- Improved financial information for investors and others - provides information on ASIC's focus in the next reporting season.
- New National Personal Property Securities (PPS) Register goes live on Monday 30 January 2012.
ACCC Chairman to Pursue Misuse of Market Power
The Australian Competition and Consumer Commission Chairman Rod Sims signalled the Commission's intention to actively pursue cases regarding the misuse of market power and unconscionable conduct.
ASX News
New listing rule. From 1 January 2012, ASX has introduced a requirement for new listing applications, that require the applicant for ASX listing satisfy ASX that its directors or proposed directors are of 'good fame and character' (new condition added to Listing Rule 1.1). To comply with this rule, applicants will have to provide extensive information for each proposed director, including a police/CrimTrac national criminal history check, ITSA bankruptcy check and a statutory declaration from each director affirming certain information.
Sources for this document: APRA; Australian Charities and Not-for-Profit Commission (ACNC); Australian Government Office for the Not-for-Profit Sector; Australian Institute of Company Directors; Australian Securities and Investments Commission; Australian Securities Exchange; Chartered Secretaries Australia; ComLaw; Commonwealth Government; Commonwealth Treasury; Corporations and Markets Advisory Committee (CAMAC); KPMG; McMahon Clarke Legal; Parliamentary Library; UK Ministry of Justice; Work Safe Australia; WorkSafe Qld; WorkSafe Vic.