While wishing everyone a happy New Year, Professor Bob Baxt sounds a precautionary note.
The area of business law in the year 2002 is going to be, as they say in the classics, a 'rip-snorter'. There will be a number of issues directors will have to consider carefully and the AICD will certainly be at the forefront in making submissions on many of these. In this first Early Warner for 2002 I will highlight major areas which I believe will be at the centre of attention for directors.
1. Trade Practices Review
The Prime Minister is apparently taking charge of this particular matter (which is a bit surprising because Trade Practices is the responsibility of the Treasurer) but it illustrates the importance of this election promise. We should see some very interesting submissions on the changes to the way in which mergers are reviewed by the ACCC, the issue of whether section 46 of the TPA (which prohibits the misuse of market power) should be amended, whether there should be any criminal sanctions for price-fixing (with directors going to jail as is in certain other countries) and, what many would regard as the most important, a review of the way in which the TPA is administered by the ACCC. Calls for a form of 'corporate governance' to oversee the work of the ACCC are likely to be a feature of submissions from the business lobbies.
2. Directors duties and corporate governance
The role of directors and how companies should be governed will continue to be a major area of focus. The NRMA case noted in this month's Law Reporter provides a signal of what we can continue to expect from the courts with calls for directors to take into account public interest issues in certain circumstances. In addition, the potential to widen the provisions in relation to insolvent trading will be reassessed by the Government in light of a number of corporate collapses. The AICD has been at the centre of the debate as whether the current rules of corporate disclosure are adequate. On top of that is the question of whether our current law dealing with auditor independence is adequate. Hopefully, the decision in this area will await the result of the HIH royal commission but governments often act in haste because they believe there is political advantage to be obtained in doing so. It will be interesting to see what occurs in this area. Finally, there has been around for sometime a promise that the insolvency laws are to be reviewed and this year may see the start of that review. In light of many corporate collapses the call may be one worth pursuing.
3. Tax reform
The work of the Ralph Committee has not been finished. A number of proposed changes were shelved because of the perceived impact this would have on the Government's support in the rural sector and proposed reforms to the treatment of trusts and private companies will once again be at the forefront of attention. The need to ensure that Australian companies can compete effectively in the international market will be at the heart of any proposed changes to tax reform.
4. Occupational Health and Safety and related matters
This is an area which is always under pressure. Victoria is likely to lead the way with the passage of the Industrial Manslaughter legislation. While the Bill that was tabled in Parliament late last year has made a number of concessions on an earlier draft, it still raises extraordinary difficult issues for directors and their advisers. Furthermore, the Bill is likely to be copied by other States including Western Australia, South Australia and Queensland. The potential of this legislation impacting on your company, whether in Victoria or not, is very significant and it is a matter which you will need to pay particular attention to in the near future.
5. Corporate compliance
The Commonwealth Criminal Code came into operation in late December 2001. This legislation is likely to have significant impact on directors and companies in areas which were previously subject of less attention than perhaps others. The issue is one that the Institute will no doubt have to consider. 6. Other areas There are no doubt many other areas of the law that will be the subject of review and reform as pressures for change arise. Privacy is just one. But one thing is absolutely clear - 2002 will be a busy year. Directors and their advisers will need to be on their toes to ensure that they and their companies comply with the law and where appropriate seek to have the law amended to deal with difficulties thrown up by the current law.
Disclaimer
The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.