Whether you are the sole director of a private company, or head of a multinational corporation, accessing sound governance and corporate advice is essential to operate effectively in a regulated and dynamic environment.
Corporate governance refers to the direction and control of companies and organisations through a set of rules, practices and processes. Good corporate governance balances the interests of a company’s internal and external stakeholders which may include its directors, shareholders, employees, customers and suppliers, financial institutions, the government, community and environment.
Good corporate governance requires an intricate knowledge of the rules, regulations, controls and policies impacting corporate behaviour and an understanding of the function and role of the board of directors.
We can provide advice and assistance regarding:
- the proper conduct of board, general and shareholder meetings
- the appointment and removal of directors and executives
- drafting, amending or interpreting the company constitution
- preparation of agendas, minutes and resolutions
- annual reports and directors’ reports
Compliance and Regulation
The Corporations Act 2001 (Cth) provides the framework for the incorporation and conduct of companies in Australia. The Australian Securities and Investment Commission (ASIC) administers the Act and oversees the regulation of most companies. Companies are required to notify ASIC of the personal details of its directors and shareholders, its registered and business address and provide updates regarding certain changes to the company’s structure and affairs.
The Australian Charities and Not for Profit Commission (ACNC) regulates those Australian companies that operate in the charity sector.
The Australian Competition and Consumer Commission (ACCC) regulates compliance with the Competition and Consumer Act 2010 (Cth) which promotes fair trading and consumer protection. The ACCC has power to investigate and enforce penalties for anti-competitive conduct, price fixing, unconscionable conduct and other consumer protection matters.
There are several other laws and government bodies with broad scope to monitor and regulate company behaviour. These laws change frequently, and often result in the strengthening of powers to enforce compliance. It is imperative that directors are aware of their corporate responsibilities and can identify potential regulatory issues to proactively manage risk.
We can assist with compliance and regulation by:
- advising on the implementation of corporate regulatory compliance systems
- reviewing practices and advising on potential breaches of competition law
- responding to and representing corporations and individual directors with respect to ASIC, ACNC and ACCC notices and investigations
- advising on privacy laws, policies and notifiable data breaches
Directors – duties, responsibilities and conflicts
Company officers have an overriding duty to act in the best interests of the organisation they represent. These duties are derived from the Corporations Act, various other statutes, and the general law. Directors may face significant penalties for breach of these duties.
Directors must act honestly, in good faith, and not use their position for personal gain. A duty to avoid a conflict of interest prohibits directors from gaining a personal benefit from an arrangement with the company without full disclosure to its members.
Directors are also required to exercise a duty of care, skill and diligence which is generally assessed commensurate with the qualifications of the director and the surrounding circumstances.
Directors may also be personally liable to third parties if they incur debts while the company is, or is in danger of becoming, insolvent.
In many situations a breach or potential breach of these duties is obvious. However, companies face many internal and external challenges and there are numerous situations where the demarcation between compliance and breach is less clear. In such cases, directors may need professional guidance to make informed and considered decisions.
Many of our corporate clients seek advice regarding:
- potential conflict and disclosure issues
- insolvent trading and directors’ liability for debts
- utilisation of safe harbour provisions
- related party transactions
Our lawyers have assisted many commercial clients, directors and organisations by providing guidance and advice across a broad spectrum of corporate issues such as:
- insolvency and administration
- mergers and acquisitions
- corporate restructuring
- industrial relations and workplace management
- intellectual property, trademarks and copyright matters
- dispute resolution and commercial litigation