Belinda Gibson, the deputy chairman of the corporate regulator for two-and-a-half years, spoke to a roomful of corporate heavyweights on Tuesday (13 November).
Gibson, a partner at King & Wood Mallesons for 20 years before she joined ASIC in 2007, addressed a range of topics, including insider trading, corporate governance, continuous disclosure and the market enforcement capabilities of ASIC, before inviting questions from the floor.
Jocelyn Moreton, the chair of the audit and risk management committee at Noni B and a non-executive director of the Australian fashion chain, asked Gibson why it takes so long for ASIC to launch legal action against company directors after a company collapses. Moreton said this delay created “uncertainty” for those directors seeking board appointments elsewhere and for the companies looking to hire them.
Gibson responded by defending the regulator’s investigative procedures.
“[Being presumed] innocent before [being found] guilty is a long-established principle I wholly agree with,” said Gibson. “It takes a long time to put together a case, particularly with regard to complex corporate collapses, as you have to unravel the whole company.
“Sometimes directors will say this takes a long time and I will say, ‘well, produce the documents that show us you are innocent’. That will be much more helpful and then we might be able to get on with the show.”
In addition to Moreton’s question, Bill Beerworth, the former executive director of HSBC Australia and the current managing director of the corporate advisors Beerworth + Partners, described the Corporations Act as “a total mess”
“Everything else has gone into the Act, why not a division on continuous disclosure?” he asked Gibson.
“The short answer is if we were in Senate Estimates or something [my response] might be ‘this is a policy matter for Government’,” Gibson responded. “I don’t know if there is that much of a push more widely that we should change the legislation. I think if you spoke to the directors in the community they would prefer leaving more discretion with ASX.”
Spreading the word
Despite the NSW Court of Appeal handing down its judgment with regard to the seven non-executive directors of James Hardie the day prior to her address, Gibson did not reveal her personal views on the case.
Rather, Gibson chose to speak about the Hardie litigation, as well as the $200 million Centro settlement in June and the High Court’s judgment in favour of Fortescue Metals last month (“that was not the outcome we sought,” said Gibson), in dispatches as it related to her analysis of ASIC’s supervisory functions.
“We have brought some important litigation over the years, including a look at what the obligations of directors are,” she said. “We do a lot of talking; we put out regulatory guidance; we bring enforcement action.”
When talking about transparency, Gibson nominated honesty, diligence, competence and dealing with conflict as the four key areas where ASIC looks to commence action for alleged breaches by corporations.
“James Hardie and Centro [litigations] dealt with diligence,” she said.