Australian Corporations Act - Governance professionals call for a review
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The Corporations Act is essentially a 19th Century regulatory model which assumes a pre-technology hardcopy world, and as such, is unsuited to the new digital economy. The corporate structures on which it is based are also essentially 19th Century constructs. Moreover, it imposes inconsistent liabilities and defences, adding to the burden of compliance and hampering the capacity of companies to perform responsibility.
All of this has been exacerbated by the accretion of piecemeal amendments to the law over decades, to shore up a framework increasingly unsuited to modern corporate realities.
LexisNexis and Governance Institute of Australia hosted a roundtable of senior governance and risk professionals in May 2017 to explore the big picture, determine what parts of the Act need attention and make recommendations on the best way to pursue holistic reform.
There have also been submissions to the Treasury on the need to reform the Corporations Act with the aim of technology neutral legislation, consistency of liabilities and defences under the law, and ensuring also that Australia has corporate structures that are fit for purpose for the 21st century.
Importantly this would include a wholesale review of corporate reporting, including remuneration reports, to reduce compliance costs and facilitate shareholder engagement, thus reducing red tape and hopefully improving shareholder engagement through AGM reform.
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