Compliance Framework
Compliance Driver
Corporations Act 2001 (Cth)
Classification
Level 2
University-wide requirement. Lower impacts.
Associated Legislation
Associated Standards
None
Associated Codes
None
Associated Information
None
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Administrative Information
Administrative Body
Australian Securities and Investments Commission
Administrative Name
Administrative Address
Mailing Address
P.O. Box 4000
Gippsland Mail Centre Victoria
Australia, 3841
Mailing Address
GPO Box 9827
Sydney NSW
Australia, 2001
Administrative Phone
1300 300 630
03 5177 3988
Administrative Email
Administrative Website
http://asic.gov.au/for-business/
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General Introduction
VC Compliance Delegate
Radha Thomas, Director Governance and University Secretary
Compliance Coordinator
Katrina Warden, Director Legal Services
Business Units Impacted
Overview
The Corporations Act 2001 (Cth) is the principal legislation regulating business entities (primarily companies) in Australia. It regulates matters such as the formation and operation of companies (in conjunction with a constitution that may be adopted by a company), duties of officers, takeovers and fundraising.
As the Commonwealth has insufficient power (under Section 51(xx) of the Australian Constitution) to legislate in relation to the formation of companies, a co-operative scheme involving a referral of power from the Australian States was created and adopted by all States (for NSW refer to the Corporations (New South Wales) Act 1990 (NSW)). Under the Corporations Agreement between the States and the Commonwealth, all changes to the Act must be referred to the Ministerial Council for Corporations (MINCO) for approval.
The Corporations Act 2001 (Cth) amendments to whistle-blower provisions commenced on 1 July 2019. These provisions expand the protections available to whistle-blowers and the liabilities of board members and senior managers of corporations, including the penalties for breaches. The provisions apply to a regulated entity, which includes corporations to which the Commonwealth constitution applies.
This legislation is relevant for the controlled entities of the University.
Compliance Obligations
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Directors' Duties
Description
Directors duties in Australia are designed to promote good governance and ensure that directors act in the interests of
the company – including putting the company’s interests ahead of their own.
Both common law and statutory obligations include:
– duty to act bona fide (in good faith) in the interests of the company as a whole
– duty not to act for an improper purpose
– duties of care and diligence
– duty to avoid conflicts of interest
– duty not to make improper use of position
– duty not to make improper use of information
– duty not to trade while insolvent
Impacts
Individual consequences can include both criminal and civil penalties. The maximum penalty is a fine of $200,000 or five years imprisonment, or both.
Breach Impact Financial:
Applicable to Controlled Entities. A university could face financial penalties if it: owns or controls a company registered under the Corporations Act, or; has appointed officers or directors to those companies, and those companies breach provisions of the Act, and liability extends to the parent or controller in certain cases (e.g. shadow/director liability, breach of continuous disclosure rules, etc.).
Offences include:
s.180 - Breach of director’s duty of care and diligence - Up to 50,000 penalty units or 3x benefit or 10% annual turnover (capped)
s.1041H - Misleading or deceptive conduct - Up to 50,000 penalty units or 3x benefit or 10% annual turnover (max cap 2.5 million PU)
s.319 - Failure to lodge financial reports - Up to 355 penalty units per contravention
s.588G - Insolvent trading - Compensation orders + civil penalty up to 25,000 penalty units
s.674 - Breach of continuous disclosure obligations (if listed) - Up to 50,000 penalty units, or 3x benefit, or 10% of turnover
Breach Impact Non-Financial:
s.1324 - Injunctions - Court may restrain a company from continuing unlawful conduct, or compel specific actions.
ASIC Act 2001, s.93AA - Enforceable Undertakings - Company may enter into a binding agreement with ASIC to remedy or prevent breaches.
s.206C, s.206F - Disqualification Orders - Officers of a corporate body may be banned from managing corporations.
s.1317E - Court Declarations of Contravention - Formal court declaration that the company contravened a civil penalty provision.
s.1317G(1C), case law - Remedial Orders - Court may order compliance training, corrective disclosure, or system/process changes.
ASIC Act 2001, s.12GLC - Public Warnings / Naming - ASIC may issue public statements or warnings.
Executive Liability: Yes:
s.180(1) - Duty of care and diligence - Civil penalty; disqualification; compensation
s.181 - Act in good faith in the best interests of the company - Civil penalty; disqualification; compensation
s.182 - Improper use of position - Civil or criminal penalty (depending on intent and outcome)
s.183 - Improper use of information - Civil or criminal penalty
s.588G - Duty to prevent insolvent trading - Civil liability; compensation; disqualification; criminal if reckless
s.191–195 - Disclosure of material personal interests - Breach may invalidate decisions; ASIC enforcement possible
s.601FD - Officers of responsible entities must act honestly and with care - Civil or criminal liability
s.344 - Obligation to ensure financial records and compliance - Personal liability for reporting failures
Criminal Penalty/Offence: Yes.
Responsible Manager
Radha Thomas, Director Governance and University Secretary
Coordinating Officer
Katrina Warden, Director Legal Services
Coordinating Unit
Legal Services
Oversight Committee/Group
None
Business Units Impacted
Obligation Framework
Associated Legislation
Associated Standard
None
Associated Code
None
Associated Information
None
Management Tools
Rule
None
Policy
None
Protocol
None
Procedure
None
Guideline
None
Other Websites
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Whistleblower Protections - eligible recipients
Description
Nominate Officers who are eligible recipients within UNE for taking a qualifying disclosure (ie. Director Audit and Risk and Associate Director Audit and Risk).
Impacts
Responsible Manager
Radha Thomas, Director Governance and University Secretary
Coordinating Officer
Radha Thomas, Director Governance and University Secretary
Coordinating Unit
Internal Audit
Oversight Committee/Group
Audit and Risk Committee
Business Units Impacted
Obligation Framework
Associated Legislation
None
Associated Standard
None
Associated Code
None
Associated Information
Management Tools
Rule
Reporting Wrongdoing at UNE Policy
Policy
None
Protocol
None
Procedure
Public Interest Disclosure Procedures
Guideline
None
Other Websites
ASIC Website - Information for Corporate Whistleblowers
Compliance Overview