The Coalition Government has delivered a $14 million annual saving for Australian companies, local clubs and associations by cutting unnecessary and costly red tape.
Parliament has passed the Corporations Legislation Amendment (Deregulatory and Other Measures) Bill 2014 which includes a number of red tape-cutting reforms to the corporations law, including:
- removing the requirement for directors of a company to hold a general meeting on the request of 100 shareholders ('100 Member Rule'). This rule was famously used by GetUp to call a general meeting of Woolworths shareholders at a cost of nearly $2 million to the company only to have the resolution rejected by over 97 per cent of shareholders. Importantly, shareholders with five per cent of voting shares will still be able to call such a meeting while 100 members retain the right to put a resolution on the agenda of a general meeting;
- improved executive remuneration reporting by relieving unlisted disclosing entities that are companies from the requirement to prepare a remuneration report, as such companies are not required to have their remuneration report adopted by shareholders. The measure also provides that listed disclosing entities that are companies will now report on the number of lapsed options of key management personnel, and the year in which those options were granted, rather than their value and the percentage of the individual's remuneration that consists of options;
- clarifying the circumstances in which directors can determine that a financial year will be shorter than 12 months;
- removing the requirement for small companies limited by guarantee to appoint or retain an auditor where they are not required to undertake an audit;
- providing the Remuneration Tribunal with the authority to set the remuneration of the Chair and members of the Financial Reporting Council, the Australian Accounting Standards Board and the Auditing and Assurance Standards Board; and
- enabling Takeovers Panel members to perform Panel functions while overseas, which is particularly important given the significant amount of overseas travel that these members often undertake as part of their role.
The passage of these measures highlights the Government's continued focus on easing pressures on Australian companies, local clubs and associations and alongside around $2 billion of red tape reductions already announced.