This is a service specifically targeted at the needs of busy non-executive directors. We aim to give you a “heads up” on the things that matter for NEDs in the week ahead – all in two minutes or less.
YOUR KEY BOARDROOM BRIEF
Getting tough on ‘white-collar’ criminal offences - proposed reforms to strengthen penalties for corporate and financial sector misconduct. The Australian Government has opened consultation on draft legislation to strengthen penalties for corporate and financial sector misconduct. The reforms intend to implement some of the recommendations of the ASIC Enforcement Review Taskforce, including:
- updating penalties for certain criminal offences in ASIC-administered legislation;
- introducing ordinary criminal offences that sit alongside strict and absolute liability offences;
- significantly increasing the financial penalties for civil contraventions by individuals from $200,000 to $1.05 million, or three times the benefit gained (whichever is greatest) from the contravention and giving courts discretion to strip contraveners of their ill-gotten gains in civil penalty proceedings;
- modernising and expanding the civil penalty regime by making a wider range of offences subject to civil penalties;
- introducing a new test to apply to all dishonesty offences under the Corporations Act 2001; and
- ensuring the courts prioritise compensating victims over ordering the payment of financial penalties.
The AICD welcomes consultation on the reforms, noting it has long called for stronger criminal and civil penalties for corporate misconduct as they are an essential part of a robust enforcement regime. Consultation ends on 23 October 2018.
They keep coming….big banks criticised for unacceptable delays in reporting, addressing and remediating significant breaches following ASIC review. Another blow this week to Australia’s big financial services groups, with ASIC identifying serious, unacceptable delays in the time taken to identify, report and correct significant breaches of the law. The law requires that significant breaches, investigated and determined by a financial institution, be reported to ASIC within 10 business days. However, one in seven significant breaches were reported later than this requirement. ASIC analysed the 2014 - 2017 breach data of a number of financial services groups (including the big four banks and AMP). Key findings from ASIC’s report include:
- financial institutions take too long to identify significant breaches, with the major banks taking an average time of 1,726 days (over 4.5 years);
- there are significant delays in remediation for consumer loss. It takes an average of 226 days from the end of a financial institution's investigation into the breach and first payment to impacted consumers;
- the average time across all institutions before a breach is discovered and the time taken to start and complete an investigation is 1,517 days;
- significant breaches (within the scope of the review) caused financial losses to consumers of approximately $500 million, with millions of dollars of remediation yet to be provided; and
- the process from starting an investigation to lodging a breach report with ASIC takes an average of 150 days with major banks.
A copy of ASIC’s media release can be found here.
ABS releases jobs figures. The ABS released job figures for vacancies, jobs filled and hours worked. Some of the key points revealed include:
- total job vacancies in August 2018 were 240,900, an increase of 3.4% from May 2018. Over the year, job vacancies increased by 19.3%, with private sector vacancies increasing by 20.3% and public sector vacancies by 9.5%;
- the number of filled jobs in Australia increased by 116,800 to 14.0 million in seasonally adjusted terms in the June quarter 2018;
- main jobs increased by 112,100 and secondary jobs increased by 4,700;
- hours actually worked decreased by 25.7 million hours to 5.2 billion hours; and
- health care and social assistance have remained the largest contributor to the number of jobs in the Australian economy.
THE WEEK AHEAD
Daylight saving commences at 2:00 am EST this Sunday. Daylight saving is not observed in Queensland, Western Australia (WA) or the Northern Territory. As WA will be three hours behind Sydney time during daylight saving, as of next Monday, ASX Market Announcements will stay open until 8.30 pm EST (5.30 pm WST). ASX Market Announcements will revert to its usual 7.30 pm EST closing time when daylight saving ends on 7 April 2019.
China’s Golden Week. China will celebrate its National Day Holiday (referred to as Golden Week) from 1 October to 7 October.
RBA interest rate decision. The RBA’s interest rate decision will be released on Tuesday. Rates are forecast to remain at 1.5%.