Corporate governance and compliance relates to how companies are regulated and monitored to make sure that they are doing the right thing. Forms of corporate governance include laws such as the Corporations Act, ASX listing rules and ASX guidelines and principles.
Corporate governance covers all aspects of a company’s life cycle, from their formation up until their de-registration and every stage along the way.
Who is responsible for corporate governance?
ASIC is generally responsible for administrating and enforcing the Corporations Act and ensuring that it is complied with, while the ASX primarily overseas matters related to the Australian Stock Exchange and ensures that the listing rules of the stock exchange are being complied with.
What do corporations need to consider?
Some things that corporations need to consider to ensure they are complying with their obligations and not in breach of the Corporations Act include:
- Directors and secretarial duties;
- Capital requirements;
- Mandatory disclosure requirements;
- Competition law;
- Consumer protections laws; and
- Risk oversight
The obligations of corporations are onerous and change regularly. For this reason, corporations generally have inhouse legal counsel as part of their company structure to ensure that they are up to date with any changes to the law and their obligations.
Corporations also need to ensure that they are receiving strong financial, accounting and taxation advice.
Directors of corporations
Agreeing to be a director of a corporation is not a decision that should be made lightly as you are effectively responsible for the actions of the corporation. It is particularly important to be aware that in some circumstances, directors can be held personally liable if a corporation fails to comply with any of their requirements.
If you would like any anything on this, please do not hesitate to contact our commercial law team.