Reducing the compliance burden for business: some welcome reforms on the horizon

By Alberto Colla and Bart Oude-Vrielink

The Treasury has recently released draft legislation for public comment, with the aim of significantly reducing compliance costs for business and improving business productivity generally. The proposals comprise: removing the obligation on a public company to hold a general meeting on the request of 100 shareholders (the so-called ‘100-member rule’); introducing a new test for payment of dividends; requiring companies to include a general description of their remuneration governance framework, to the extent that it is not included elsewhere in the annual report; removing the requirement to disclose the value of options granted to key management personnel, replacing it with a requirement to disclose the number of lapsed options and the year in which they were granted; relieving certain disclosing entities from the obligation to prepare a remuneration report; transferring the remuneration setting responsibility for the offices of the Financial Reporting Council (FRC), Australian Accounting Standards Board (AASB) and Auditing and Assurance Standards Board (AUASB) to the Remuneration Tribunal; improving the efficiency of the Takeovers Panel, by allowing the panel to perform panel functions while overseas; exempting certain companies limited by guarantee from the need to appoint or maintain an auditor; and a minor technical amendment to clarify that companies may vary their financial year by up to seven days, regardless of the length of previous years.

The bill is expected to be introduced in the 2014 autumn/winter sittings of parliament. There is a five-week consultation period, with submissions closing on 16 May 2014.

Accordingly, you should note the forthcoming changes and recognise that, as with any draft legislation, the proposed reforms are likely to undergo refinement as a result of the consultation process and then the parliamentary process…

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