Advocacy

The AICD’s advocacy team represents the interests of members in public debate and to governments.

The road to 2018

In December the Australian Institute of Company Directors (AICD) released our latest report tracking progress against our target of achieving a minimum of 30 per cent female representation on ASX 200 boards by the end of 2018.

While progress is being made, the report found there is much room for improvement, with 28 per cent of ASX 200 boards still without a single female director.

As at 30 November 2015 there were 21.5 per cent female directors on ASX 200 boards and 24.8 per cent on the ASX 100.

Clearly, for the ASX 200 to achieve the target of at least 30 per cent by the end of 2018, the appointment rate of women directors must continue to rise.

The AICD is stepping up its efforts to encourage companies and chairs to devote more energy to increasing gender diversity.

The new chairman of the AICD, Elizabeth Proust AO FAICD, has publicly noted that if ASX 200 companies cannot achieve the 30 per cent target by 2018, the AICD will reconsider its position on other options, including regulatory quotas. The AICD has consistently opposed the imposition of legislative quotas for gender diversity. We recognise, however, that if the 30 per cent target cannot be achieved voluntarily, there is a stronger case for regulatory responses to hasten the pace of change.

This year the AICD will launch several new programs, research and strategic partnerships to assist organisations to achieve greater diversity on their boards. These initiatives will build on the strength of our current programs, including our Chair’s Mentoring Program and Board Diversity Scholarship Program. Our new quarterly reporting will also provide greater visibility on progress against the 30 per cent target.

Source: 30% by 2018: Gender Diversity Progress Report (December 2015), Australian Institute of Company Directors

Insolvency reform

The Innovation Statement released by the Prime Minister Malcolm Turnbull late last year included some worthwhile initiatives for business, not least of which were the proposed changes to insolvency laws.

The AICD has led the debate on the need for insolvency reform, and the proposals announced by the Government represent a positive first step in achieving a much needed overhaul of Australia’s outdated director liability framework.

The proposals included:

• Introducing a “safe harbour” for directors from personal liability for insolvent trading if they appoint a restructuring adviser to develop a turnaround plan for the company.
• Making “ipso facto” clauses, which have the purpose of allowing contracts to be terminated solely due to an insolvency event, unenforceable if a company is undertaking a restructure.
• Reducing the current default bankruptcy period from three years to one year.

It begins a transformation of the Australian economy by allowing companies and directors to take necessary risks to innovate.

The AICD will keep a close eye on the reforms as they progress through Parliament and will make substantive inputs into the process as appropriate.