Governance News — 25 March 2014: corporate law and governance developments in Australia and overseas
Boards and directors: the Australian Financial Review (AFR) has reported that highly regarded chairman David Gonski believes excessive expectations of boards are sapping them of risk-taking initiative and hampering long-term performance. Also this week, director workload was topical with proxy adviser Institutional Shareholder Services (ISS) reportedly warning QBE shareholders against the proposed appointment of a Hong Kong-based nominee who already holds seven other directorships. And the dual questions of what makes a director independent and whether board independence adds value for shareholders have been explored by journalist Domini Stuart in the Company Director Magazine.
Directors’ and officers’ duties: Dr Bob Austin, the head of Corporate HQ Advisory, has called for statutory reform to introduce an effective business judgment rule so that company directors can make honest entrepreneurial decisions without fear of liability, and to that end he has prepared a draft rule. Also on the subject of director liability, the Australian Institute of Company Directors has urged the new Tasmanian government to fix ‘outdated director liability laws’, which it says impose an ‘excessive liability burden’ on directors; and a recent Supreme Court decision highlights the difficulties and potential dangers for directors in managing competing interests within a family-controlled corporate group…
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Despite their prevalence, there has been some uncertainty in relation to the income tax treatment of earnout arrangements.