Strong whistleblowing systems support strong governance standards.
Unfortunately many of our current laws, including the Corporations Act 2001, provide piecemeal and limited protections that offer little certainty and few incentives for whistleblowing.
This governance issue is now a reform priority for 2017. The government has issued a discussion paper on corporate sector and tax whistleblower protections to accompany a broader parliamentary inquiry due to report mid-year.
These reviews will consider some big issues – from US-style “rewards” for whistleblowers to whether Australia needs a standalone whistleblower Act – as well as questions of scope and coverage.
Some of the likely directions for reform are clear from the late 2016 deal on the Fair Work (Registered Organisations) Act 2009 (the RO Act). The changes to the RO Act (moved by Senators Hinch and Xenophon) provide for a more robust framework for whistleblowing within registered organisations (trade unions and employer groups). The deal also commits the government to achieving equal or better reforms for the corporate and public sectors. The RO Act changes include:
- broadening the definition of who can be a whistleblower (to include former officers, employees and members);
- broadening the definition of disclosable conduct;
- removing the requirement that disclosures must be made in good faith;
- improved access to compensation for whistleblowers, where they suffer loss;
- protecting anonymous disclosures; and
- increasing the penalties for taking reprisals against whistleblowers.
The Australian Institute of Company Directors (AICD) will be providing input to the parliamentary inquiry and government consultation in support of a stronger and more effective whistleblowing regime for corporate Australia. Initial consultations close in February with more detailed review expected over coming months.
Progress on fundraising reform
The AICD has been working as part of a coalition of not-for-profit (NFP) sector bodies to call on Australian governments to address the urgent need for fundraising reform.
To this end, last year the AICD became a joint signatory to the Statement on fundraising reform. This statement outlines a three-step plan to achieve a nationally-consistent regulatory regime for fundraising with the Australian Consumer Law (ACL) at its heart:
- Clarify (with minor amendment) the ACL’s application to fundraising activities.
- Repeal fragmented state and territory fundraising statutes.
- Work with regulators and self-regulatory bodies to provide guidance to fundraisers and continue to improve fundraiser conduct.
The release of the statement coincided with the first formal post-implementation review of the ACL. The AICD has sought to elevate fundraising reform as a priority in this review.
An interim report released in October 2016 identified fundraising as a key issue and the AICD was represented at a November 2016 meeting of stakeholders addressing fundraising reform in detail. This meeting, convened by Consumer Affairs Victoria, provided an opportunity to further raise the profile of the issue and to demonstrate the unity of the sector in its call for action to achieve reform. A final report on the ACL review will be presented to consumer affairs ministers in March 2017.
Members wanting to learn more and support this campaign can visit: companydirectors.com.au/fundraisingreform
ASIC Industry Funding Model
On 16 December 2016, the AICD lodged a submission on the Proposed Industry Funding Model for the Australian Securities and Investments Commission (ASIC). The AICD supports industry funding for ASIC. We have long argued that it is critical for the corporate regulator to be adequately resourced to fulfil its important functions.
We have, however, suggested some improvements to the draft funding model. It is important that ASIC is focused on the right priorities. Regular external review of priorities, benchmarking of ASIC’s costs with comparable regulators and consultation on funding priorities are encouraged. We also continue to query whether a portion of ASIC’s registry income should be applied to its operating costs, before additional industry funding is drawn.