find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Corporate Lawyer (3-5 years PQE)
Category: Corporate and Commercial Law | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· National firm acting for domestic and multinational clients
View details
Lawyer – CTP Insurance (2-3 years)
Category: Insurance and Superannuation Law | Location: Sydney CBD, Inner West & Eastern Suburbs Sydney NSW
· Well-regarded team offering mentoring and career development
View details
Labor plans a US-style CLERP 9 amendment

Labor plans a US-style CLERP 9 amendment

DESPITE ONLY being passed in June, the CLERP 9 Act will be amended to resemble the more-prescriptive, US-style corporations law in the event of an Australian Labor Party victory in next month’s…

DESPITE ONLY being passed in June, the CLERP 9 Act will be amended to resemble the more-prescriptive, US-style corporations law in the event of an Australian Labor Party victory in next month’s federal election.

The ALP and the Federal Government were involved in a heated debate regarding the fabric of the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (CLERP 9), but the government prevailed and many of the ALP’s proposed amendments were omitted from the Bill. Ross Cameron, parliamentary secretary to the Treasurer, called the ALP’s view ‘regulatory overkill’.

According to a spokesperson for Stephen Conroy, shadow minister for corporate governance and financial services, an ALP win will see corporate Australia being forced to re-comply with a new set of laws. The main thrust of the amendments would focus on the banning of company auditors from providing non-audit services to their clients.

“You will have seen throughout the CLERP 9 debate that Labor moved to prohibit the provision of certain non-audit services,” said the spokesperson. “Now, that will be a policy that Labor will implement if in government. There are non-audit services that would potentially compromise the auditor if they are being provided by the auditing company. Certain non-audit services should not be provided. Bookkeeping, financial information systems design, appraisal or evaluation services, actuarial services, audit services and management services.”

That approach mirrors the Sarbanes-Oxley Act and was driven by the desire to eliminate the kind of conflicts of interest that brought down Enron’s auditors, Arthur Andersen. According to one US media report from 2002, Andersen executives considered cutting ties with Enron a year prior to the collapse, but decided that the lucrative earnings from their client outweighed the risks of continuing the association.

Some of Australia’s largest companies, including AMP and Holden, are themselves implementing Sarbanes-Oxley compliance and indeed, any company that wishes to raise capital in the US or become an SEC registrant must do the same.

Observers said that implementing stronger, more prescriptive corporate laws here could penalise smaller listed firms for whom the financial and resource cost would be too onerous. The Australian stock market is structured with a large amount of small players and a more prescriptive approach would create inefficiencies, observers said.

The ALP has also railed against what it terms ‘corporate greed’ and has pledged to curb exorbitant payouts to departing CEOs.

As well, the ALP is keen to increase penalties for serious breaches of the Corporations Act. However, Justice Neville Owen, chairman of the HIH Royal Commission, said increased penalties are unlikely to result in fewer serious breaches.

“I remember during the [HIH] Royal Commission speaking with a well-credentialed and respected Australian company director and chairman, and I asked him whether or not he thought that increasing penalties would have an effect and he just looked at me and said, ‘Anyone who is concerned with penalties would never get a seat on my board’,” Justice Owen said recently.

Stuart Fagg is the Editor of Lawyers Weeklys sister publication Risk Management.

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Labor plans a US-style CLERP 9 amendment
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Warning
Aug 23 2017
NT Law Society sounds alarm on mandatory sentencing
The Law Society Northern Territory has issued a warning over mandatory sentencing, saying it hasn’...
Unite
Aug 22 2017
Professionals unite in support of marriage equality
The presidents of representative bodies for solicitors, barristers and doctors in NSW have come toge...
Aug 21 2017
Is your firm on the right track for gig economy gains?
Promoted by Crowd & Co. The way we do business, where we work, how we engage with workers, ev...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...