Above Board: Board Advisory and Governance Update – Winter 2025

New joint guidance on conducting meetings using technology was released on 17 June. The joint guidance was the result of a project involving the Australasian Investor Relations Association (ARIA), the Business Law Section of the Law Council of Australia (BLS), AICD and GIA. It was developed following a roundtable hosted by Johnson Winter Slattery in our Sydney office in February 2025. JWS Partner John Keeves, a member and former Chair of the Executive of the BLS, has been leading the involvement of the BLS in the development of the joint guidance.

The guidance document, with a foreword by Mr Joseph Longo, Chair of ASIC, is primarily designed to assist ASX-listed companies in relation to their AGMs, but has potentially wider relevance, including for larger membership-based organisations. 

The joint guidance is partly in response to a call for further guidance by the Statutory Review, that was commissioned to review the 2021 and 2022 amendments to the Corporations Act 2001 (Cth) as required by the legislation. This recommendation was agreed to in principle in the Commonwealth Government’s response to the Review’s recommendations.

The joint guidance draws on the experience of the four organisations over the past three years, using the new provisions in practice and updated the previous joint guidance issued in 2021, in the midst of the COVID-19 pandemic.

In a related development, ASIC recently released FAQS on using technology to hold meetings. The ASIC FAQs also appear to have been in response to the call for further guidance by the Statutory Review, and provide useful insight into ASIC’s views on 21 helpful questions for entities holding meetings using technology.

Effective board minutes are key governance tool for boards, providing a contemporaneous record of the business transacted at board meetings and can assist in establishing that directors have complied with their legal obligations.

The Australian Institute of Company Directors and the Governance Institute of Australia have recently released a joint statement reflecting updated guidance on effective board minutes and the use of Artificial Intelligence (AI), supported by a legal opinion on contemporary issues in minute-taking. The joint statement provides directors and secretaries with practical guidance for board minutes and considerations for the use of AI in draft minute preparation. The key principles outlined in the statement and opinion confirm that:

• While not a comprehensive report of the discussion of a board meeting, or of each director’s contribution, minutes should include key points of discussion and outline the reasons in support of the decisions made by the board – in particular, minutes should record significant issues or questions raised with management and their response.
• AI can be a useful tool to assist in the preparation of draft minutes, however there are risks – including risks associated with AI producing material inaccuracies or missing key details and nuances. These risks need to be considered in light of an organisation’s existing data governance framework and appropriate checks and controls implemented to maintain the integrity and quality of the minutes and to ensure that they accurately reflect board decisions.
• Given the pace at which technology is evolving, regular review, risk assessments and testing of AI should be undertaken to ensure that the benefits and opportunities that AI can offer are maintained, and that appropriate safeguards are adopted.

ASIC’s civil penalty proceedings against the former directors of The Star Entertainment Group Ltd concluded in May, with a decision expected some time in 2026. The case, in which it is alleged that the directors breached their statutory duty of care in s 180 of the Corporations Act is being closely watched for what it may say about non-executive directors’ obligations of oversight.

In February 2025, Star’s former Chief Casino Officer Gregory Hawkins and Chief Financial Officer Harry Theodore were found, based on agreed facts, to have contravened s 180(1): see ASIC v Hawkins [2025] FCA 121. Hawkins’ admitted contraventions included approving an agreement between Star and the gambling junket Suncity in 2018, knowing that the conduct of Suncity’s representatives exposed Star to the risk that it would breach the law or become unsuitable to hold a casino license, and failing to report the information he knew about Suncity to the board. 

Theodore breached s 180(1) by failing to prevent Star from sending correspondence to its bank that contained inaccurate, incomplete and misleading representations about the use of China Union Pay cards for gambling purposes at the bank’s terminals located in the casino. Hawkins was ordered to pay a civil penalty of $180,000 and disqualified from managing corporations for 18 months, and Theodore was ordered to pay a $60,000 civil penalty and disqualified for nine months.

The non-executive directors in the Star case decided to defend ASIC’s claims that they breached their duty of care in approving the expansion of Star’s relationship with individuals with reported criminal links, rather than addressing money laundering risk by inquiring into whether Star should be dealing with them. ASIC also alleged that the directors, when provided with information about money laundering risks affecting Star, were negligent in failing to make further enquiries of management about those critical risks. 

The business community, including Australia’s three million company directors and their advisers, are awaiting Justice Lee’s decision with interest. It will be an important next chapter in the evolving directors’ duty jurisprudence.

ASIC published its Regulatory Guide 280: Sustainability Reporting (March 2025) which is directed at entities that are required to prepare a sustainability report under Ch 2M of the Corporations Act. It explains how ASIC will exercise specific powers under legislation, how ASIC interprets the law and the principles underlying ASIC’s approach. It is also intended to provide practical guidance to entities about complying with their sustainability reporting obligations, including by providing a high-level summary of the reporting obligation contained in the Australian Accounting Standards Board’s (AASB’s) sustainability standards.

The new reporting requirement is being phased in from 1 January 2025, and will eventually cover all entities that currently lodge their financial reports with ASIC and that are:

• entities or groups that exceed at least two of the following three size thresholds: consolidated revenue for the financial year of $50 million or more; consolidated gross assets at the end of the financial year or $25 million or more; or 100 or more employees at the end of the financial year;
• entities that are registered or required to apply for registration under the National Greenhouse and Energy Reporting Act 2007 (Cth); and
• registered managed investment schemes, registrable superannuation entities or retail corporate collective investment vehicles (CCIVs) with assets at the end of the financial year of $5 billion or more.

For now, the sustainability report contains the information required by the standards that relates to the impact of climate change on the reporting entity. It is intended to contain information useful to primary users of general purpose financial reports about climate-related risks and opportunities that could reasonably be expected to affect the entity’s cash flows, access to finance or cost of capital over the short, medium or long term. The main disclosures relate to governance, strategy, risk management, and metrics and targets, including information about scenario analysis and Scope 1, Scope 2 and Scope 3 greenhouse gas emissions.[1] Scenario analysis must be carried out using at least the following two scenarios: “limited to” and “well exceeds” global average temperature increase mentioned in s 3(a)(i) of the Climate Change Act 2022 (Cth) (that is, 2˚C above pre-industrial levels).

The Regulatory Guide explains the process for applying for relief (that is, an exemption from or modification of the reporting requirements) but explains that ASIC is still considering the situations in which it would be granted. It also deals with the fraught question whether the climate-related financial disclosure required in the statutory sustainability report should be carved-out of broader (voluntary) sustainability or ESG reports, including for reasons of directors’ personal liability.

The Regulatory Guide draws attention to directors’ broad statutory duty of care but does not address in any detail the specific liability provisions that apply including ss 344, 1038 and 1309 of the Corporations Act and the “reasonable steps” that directors and officers need to take to ensure the disclosure meets the statutory requirements. 

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[1] AASB (n 1) Preamble. 

ASX is introducing a new close review procedure to be used when ASX has serious concerns about an entity’s willingness or ability to comply with any disclosure-related Listing Rules (Compliance Update no. 06/25). The purpose of the close review procedure is to drive improvement in disclosure practices and is only intended to be used where an entity has seriously and repeatedly fallen short of the disclosure standards required by ASX. As such, it is expected that there will only be a small number of entities subject to the procedure at any one time. Under the procedure, ASX will apply additional scrutiny to an entity’s market announcements for an initial period of six months (the close review period).

Before initiating a close review period, ASX will privately write to the entity to outline ASX’s concerns and will give the entity an opportunity to make submissions about ASX’s proposal and suggest an alternative course of action. If ASX decides to proceed, ASX will publicly announce the commencement of the close review period by releasing an announcement against the entity’s ASX code. ASX may also publish a list of entities that are subject to the close review procedure separately on its website.

During a close review period, any announcement that an entity seeks to release on the Market Announcements Platform (other than periodic reports and administrative announcements) will be subject to the following additional processes: 

• the announcement will be referred to ASX Compliance for review before release;
• the announcement will be reviewed to check for compliance with the Listing Rules and consistency with any applicable guidance; and
• ASX Compliance will make an assessment of whether the entity has correctly characterised the likely market sensitivity of the announcement. 

These additional processes will cause delays in the release of announcements to the market. ASX has stated that entities will be required to request a trading halt in the case of a market sensitive announcement to allow time for ASX to complete its review. ASX has also indicated it will suspend trading of an entity’s securities if it identifies concerns in its review of an announcement and those concerns are not quickly and co-operatively resolved. 

ASX will expect any entity subject to a close review period to take appropriate steps to improve its disclosure practices during the close review period. If an entity is not able to demonstrate that it is willing or able to comply with the Listing Rules, ASX may extend the review period, direct the entity to take additional remedial steps, and/or take other enforcement action. ASX has also warned that if an entity is subject to the close review procedure for more than 12 months, ASX will likely require the entity to ‘show cause’ why it should not be removed from the Official List. 

Capital raising activities are generally understood to give rise to heightened disclosure obligations (with Chapter 6D prospectus and cleansing notice requirements). However, ASIC has recently commenced Federal Court proceedings against Wiluna Mining Corporation Ltd and two of its former officers in connection with ASX disclosures regarding the outcome of its capital raising.

In June 2022, Wiluna announced to ASX that it had raised $57.3 million as part of an entitlement offer. However, $7 million of this (representing one application for shortfall shares from a single investor) was allegedly never received – even though the relevant shares were issued. The company went into administration just over a month later. The market was never advised of the non-receipt of this $7 million.

ASIC alleges that Wiluna breached its continuous disclosure obligations by not disclosing information that it knew would (or was reckless or negligent with respect to whether such information might) have a material effect on price. Further, ASIC alleges that Wiluna engaged in conduct that was misleading or likely to mislead or deceive.

ASIC also alleges that: (a) the former Chair of Wiluna (Mr Jerkovic) breached his duties of care and diligence in section 180(1) by failing to cause Wiluna to correct its ASX disclosures; and (b) both Mr Jerkovic and the former Chief Commercial Officer of Wiluna (Mr Malone) breached obligations in sections 1309(2) and (12) by failing to take reasonable steps to ensure that information given to members and the ASX was not misleading. 

ASIC is seeking declarations and costs against Wiluna; and declarations, pecuniary penalties, disqualification orders and costs against both Mr Jerkovic and Mr Malone.

In its media release, ASIC’s Chair highlighted this as an area of regulatory focus and stated that “the lack of transparency and subsequent corporate failure have the potential to drive a loss of confidence in our capital markets. Market integrity concerns like this may lead to diminished investor participation in capital raisings in all or sections of Australian equity markets, which ultimately impacts the Australian economy and international standing”. 

When an entity becomes “aware” of price sensitive information is of fundamental importance in determining the point in time at which a disclosure obligation arises. The issue of awareness was considered extensively in the Crowley v Worley dispute, and was recently further considered by the Full Federal Court in the CBA class action appeal.

In the Worley case, the Court held that a company would have information where: (a) the information in fact existed; (b) reasonable information systems or management procedures ought to have brought the information to the attention of a relevant company officer; and (c) acting reasonably, the company officer ought to have discerned the significance of the information.

However, in the CBA decision, the Full Federal Court accepted that this did not have the effect of extending the concept of “awareness” to an “awareness of facts that are merely capable of discovery through a process of further investigation into their existence, still less to facts that are capable of discovery with the benefit of hindsight.”

In reaching this conclusion, the Court noted that:

• it is not the case that an entity can never breach its continuous disclosure obligations where the price sensitive information is constituted by, or may be drawn from, information on an entity’s database;
• the continuous disclosure regime does not impose a wide ranging obligation on listed entities to analyse their data merely on the basis that if they did so, someone could then derive price sensitive information from that data – as any such obligation may be impossible to fulfil; and
• listed entities need to have in place policies and procedures that are effective to ensure that information known by relevant personnel within the entity that should be escalated, is escalated – absent this, an entity may find itself in breach of its continuous disclosure obligations in respect of information that it is deemed to have but which has not been appropriately escalated.

A recent decision handed down by the District Court of New South Wales considered the question of whether certain misleading or deceptive conduct was engaged in by both a company and its directors, or whether the directors were merely involved in or caused the company to engage in the conduct.

The case in question involved the issue of shares pursuant to an information memorandum (IM) and related materials, which were found to include misleading statements in relation to the amount of funding secured and the development of an information technology trading platform. Relevantly, the IM contained a declaration from the directors confirming that they had made reasonable enquiries to ensure that the IM did not contain any false or misleading information, and that they had consented to the IM being issued to prospective investors.

In finding that the directors were personally responsible for the misleading statements, the Court noted that:

• being “engaged” in conduct is more than merely being “involved” – an important criterion in distinguishing between the two concepts is whether a person has adopted the conduct of another as their own; and
• a person will have adopted the conduct if it could objectively be attributed to them by a reasonable person.

The fact that the directors had consented to the issue of the IM amounted to them “adopting and approving” the contents of the IM, such that a reasonable person would have understood the IM to be statements by both the company and the directors. As such, the directors had themselves engaged in misleading or deceptive conduct and were jointly and severally liable (together with the company) for damages.

ASIC has released more than 50 public submissions received in response to its discussion paper on the evolving dynamics between public and private markets (read our previous Above Board update), distilling the feedback into several themes and outlining its proposed next steps.

The key themes identified by ASIC include:

• Structural and cyclical factors are shaping both public and private markets. While industry feedback was mixed, most submissions accepted that there are at least some structural elements influencing the decline in IPOs and listed entities in Australia – with the growth in private markets recognised as a significant and structural global trend.
• Public market adjustments would improve and enhance their attractiveness. There is general acceptance that public markets play a critical role in the Australian economy, with a number of potential initiatives put forward designed to enhance public markets for both listed entities and their directors – including streamlining IPOs and disclosure requirements, simplifying governance and director responsibilities, amending free float requirements and facilitating more foreign listings and share structures.
• Private markets are here to stay and grow, with a measured approach to regulatory uplift required. Private markets play an important role in capital allocation that needs to be complementary to public markets. While the regulatory framework is generally sound, there is scope for targeted uplift and more active and ongoing monitoring and supervision in wholesale and retail private markets – with ASIC encouraged to take a measured approach to promote the quality and integrity of private markets with a focus on investor protection and market integrity, having regard to international standards and experience.
• Private credit is good for the economy and investors, if done well. The growing availability of private capital has met a real need and, if done well, can be beneficial for both investors and borrowers. However, due to several factors – including opacity, rapid growth and untested status in a downturn – increased supervision is warranted, including to address concerns around non-investment risk-driven losses.
• Superannuation is a significant and structural influence in markets and investment. Through the growth of superannuation, retail investors have become exposed to the risks and opportunities of private markets and, as such, rely on good and clear disclosure about the investment strategies they may choose. Greater insight on good governance, disclosure and conduct practices to support this is warranted.
• There is more work to be done on data and transparency of private markets. Feedback suggests that ASIC may have underestimated the size of private markets in Australia, with greater transparency required as the market grows and matures – to not only create confidence, but also to increase participation and access. 

As a first step, ASIC is implementing a two-year trial to streamline the IPO process for certain eligible entities – designed to reduce deal execution risk. Under the trial, entities that seek to list via ASX’s fast-track process will have the ability to lodge their draft offer documents with ASIC for review up to 14 days prior to formal lodgement. ASIC will also adopt a no action position to allow eligible entities to accept applications from retail investors during the exposure period (aligning the process for prospectuses with PDSs). It is anticipated that this streamlined process will reduce the overall IPO timeframe by up to a week, with ASIC flagging it will generally not need to extend the 7-day statutory exposure period except where there is material new information.

Further initiatives and roadmaps for public and private markets are expected to be announced in Q3 and Q4, respectively.