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    Governance News 2 April 2020

    120 minute read  01.04.2020 Mark Standen, Siobhan Doherty, Kate Hilder

    In this special COVID-19 edition of Governance News, we feature coverage of: a) new blanket restrictions on foreign investment; b) developments in relation to remuneration (payment of short term bonuses), dividends and buy-backs; c) AGM guidance and considerations for companies; and e) coverage of actions being taken by business, government and by regulators in response to the COVID-19 threat/disruption.  

    In addition, this issue includes a case note on the Full Federal Court decision in in Cassimatis v Australian Securities and Investments Commission [2020] FCAFC 52.  

     

    Full coverage of this weeks content is now available


    Past issues are available

    read this issue
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    Featured COVID-19 Developments and Insights Navigation Show below Hide below

    • Top Story | COVID 19: New blanket restrictions on foreign investment
    • Top Story | COVID 19: How the changed FIRB rules affect the ACCC and ATO
    • Top Story | COVID-19: additional funding and further restrictions
    • Top Story | Understanding the COVID-19 'JobKeeper Payments'
    • Commercial property tenancies: The Prime Minister has announced a temporary 6-month moratorium on evictions 
    • Expanded business loan relief measures announced by the ABA: $250 billion worth of loans covered are now able to access a six month deferral of payments 
    • New Commission established to coordinate advice to the government on the non-medical aspects of the pandemic, including advice about the labour response

    Boards and Directors Navigation Show below Hide below

    • Top Story | An end to the Storm? The Full Federal Court has confirmed that Storm Financial Directors breached their s180(1) duties 

    Diversity Navigation Show below Hide below

    • 'Lack of diversity presents a systematic risk to portfolios': Glass Lewis says lack of board diversity poses a 'particular risk' given those 65 an older are more vulnerable to the effects of COVID-19 
    • United States | Gender parity on boards by 2030?  Equilar Q4 2019 Gender Diversity Index released
    • In Brief | The WGEA has delayed the start and extended the report submission period for 2020 to assist employers who may need some additional time to prepare and submit compliance reports because of COVID-19-related disruption.  The 2019-20 compliance report is now due for submission between 1 May 2020 and 31 July 2020 (though it is possible to submit data from 1 April)

    Remuneration Navigation Show below Hide below

    • Large UK banks have agreed to temporarily suspend dividends and buybacks on ordinary shares and cancel payments of any outstanding 2019 dividends in response to the PRA's request 
    • Shareholder adviser Pirc has urged companies to suspend executive bonuses for the duration of the pandemic
    • 195 global institutional investors have called on companies to consider suspending share buybacks and limiting executive and senior management compensation for the duration of the pandemic
    • GM and Ford are reportedly implementing plans to reduce compensation 
    • In Brief | The PRA has called on insurers to exercise prudence when considering any distributions to shareholders or in the context of making decisions on variable remuneration

    Shareholder Activism Navigation Show below Hide below

    • Occidental Petroleum Corp has announced it has reached an agreement with activist Carl Icahn 

    Meetings and Proxy Advisers Navigation Show below Hide below

    • The ASA 'strongly recommends that all companies move to a hybrid AGM format' in light of the COVID-19 outbreak (but does not support virtual AGMs)
    • United Kingdom | Supplementary COVID-19 AGM guidance released in light of 'stay at home' restrictions
    • The Governance Institute has reiterated the need for companies to remain in close contact with shareholders and investors concerning AGM plans in light of the rapidly changing circumstances
    • ASX supports COVID-19 AGM guidance issued by ASIC (and separately) by the Governance Institute, AIRA and Law Council 

    Disclosure and Reporting Navigation Show below Hide below

    • ASX COVID-19 compliance update: guidance on meeting continuous disclosure obligations and temporary emergency capital raising relief measures announced
    • APRA has announced temporary changes to reporting requirements for ADIs and RFCs because of COVID-19
    • Three month extension: AUSTRAC will accept compliance reports for 2019 until 30 June
    • UK Financial Regulators announce a package of COVID-19 measures

    Markets and exchanges Navigation Show below Hide below

    • ASX is replanning the CHESS replacement implementation timetable: Consultation on a new schedule will open in June 

    Other Shareholder News Navigation Show below Hide below

    • Wrong Zoom?  The FT reports that SEC has intervened to suspend Zoom Technologies shares after investors confused the company with Zoom Communications (the video calling app)

    Regulators Navigation Show below Hide below

    • ASIC market integrity update: COVID-19 special edition released
    • BIS has delayed Basel III reforms for one year because of COVID-19
    • APRA has announced it will defer capital its scheduled implementation of the Basel III reforms in Australia by one year
    • 'Rainy day' planning means the financial system is well placed weather the COVID-19 crisis says APRA Chair Wayne Byres
    • Competition must, and will, survive the 'current crisis' says ACCC Chair Rod Sims 
    • In Brief | ACCC has adjusted its regulatory priorities in light of COVID-19: While our 2020 Compliance and Enforcement Priorities remain in place, we will re-focus our efforts to those priorities of most relevance to competition and consumer issues arising from the impact of COVID-19

    Corporate social responsibility and sustainability Navigation Show below Hide below

    • RIAA report finds that demand in Australia for ethical investing is at an 'all time high' following the summer bushfires

    Financial Services Navigation Show below Hide below

    • APRA and ASIC have written to RSE licensees outlining their expectations during the period of disruption caused by COVID-19
    • Early access to super: Assistant Minister Jane Hume confirms that the ATO will be responsible for assessing applications for the early release of superannuation by members impacted by the Coronavirus
    • Expanded early access to superannuation should not pose a problem for superannuation funds argues Liberal Senator Andrew Bragg 
    • The AIST has warned consumers about scams involving the newly-announced early-release super measures 
    • The European Banking Federation says banks should not pay dividends for the financial years 2019 and 2020 until at least 1 October 2020  
    • Systemic Risk Council recommends banks should cease equity buybacks, dividends and be ready to suspend bonuses in order to maximise their capacity to lend
    • APRA has postponed the implementation of Reporting Standard HRS 605.0 Private Health Insurance Reforms Data Collection
    • In Brief | The AFR reports that in recognition of the financial hardship facing many members as a result of the COVID-19 pandemic, Australia's four biggest health insurers, Medibank, Bupa, HCF and NIB, have abandoned plans to increase premiums on 1 April
    • In Brief | IT News reports that the CBA and Westpac have moved to temporarily scrap merchant service fees for electronic card payments to support businesses in the downturn caused by the pandemic 
    • In Brief | Tax and Super Australia has called for the superannuation guarantee amnesty to be extended for a further six months to give employers whose businesses have been impacted by COVID-19 more time 
    • In Brief | Banking (BEAR) determination No 1 of 2020 specifies the timeframe (30 days) for lodging changes to accountability statements and maps. The determination came into effect on 30 March and is due to sunset on 1 April 2030
    • In Brief | Westpac has announced that acting Westpac Group CEO Peter King has been appointed CEO.  In addition, Westpac announced that annual short term bonuses for the CEO and the group executive have been cancelled

    Risk management Navigation Show below Hide below

    • Miners asked to submit COVID-19 plans: The QLD government has asked resources companies implement additional COVID-19 precautions to protect workers 

    Restructuring and Insolvency Navigation Show below Hide below

    • United Kingdom | Temporary COVID-19 relief for companies and directors announced

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    Governance Newsletter Boards & Directors Corporate misconduct and liability Corporate social responsibility & sustainability Directors and officers duties and liabilities Disclosure and Reporting Diversity Financial Services Governance Markets & Exchanges Meetings & Proxy Advisors Overseas perspectives Regulators Remuneration Restructuring and insolvency Shareholder Engagement Shareholder activism
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