Taking the lead

Updated AGM laws and a new positive duty on employers to prevent sexual harassment have the AICD’s support, writes Louise Petschler GAICD. AICD’s advocacy area is also changing its name to reflect its focus on governance and policy leadership.

Workplace sexual harassment

The AICD is supporting a proposal for Australian employers to have a new legislative duty to prevent workplace sexual harassment. The proposal for a new positive duty under the Sex Discrimination Act 1984 (Cth) is one of the recommendations from the Australian Human Rights Commission (AHRC) 2020 Respect@Work report.

The new duty would require employers to take reasonable and proportionate measures to prevent workplace sexual harassment, backed by new powers for the AHRC to enforce the positive duty.

Our in-principle support for a new positive duty recognises the need for greater focus on preventing workplace sexual harassment at organisational and board level. Respect@Work found that workplace sexual harassment is “prevalent and pervasive” in every industry, every location and at every level in Australian workplaces.

The new duty would sit alongside existing WHS and Sex Discrimination Act obligations. Under the existing law, employers have responsibilities to ensure they are not held vicariously liable for sexual harassment under the Act. As directors know, employers also have duties under WHS laws to eliminate or minimise risks including sexual harassment. Currently, employers can only be liable for misconduct if an incident of workplace sexual harassment occurs and an individual complaint has been made.

In the AICD’s view, a new positive duty would encourage a stronger focus on eliminating risks of workplace sexual harassment. It would require organisations to assess whether they are meeting proactive obligations to take reasonable steps to prevent harassment from occurring, rather than responding to individual complaints.

The AICD is engaging with other stakeholders on this proposal. We look forward to contributing to potential legislative drafting, including (importantly) definitions of “reasonable and proportionate measures” in framing new obligations under the Act.

Virtual AGM reforms

Permanent changes to the Corporations Act 2001 (Cth) passed federal Parliament in February, paving the way for greater use of electronic communication and e-signatures, and for companies to run virtual AGMs on a permanent basis. The new laws make permanent those elements of the temporary relief provided to manage the disruption of the COVID-19 pandemic on corporate meetings and communications.

Companies can choose to run AGMs in physical, hybrid or (if their constitution allows — in many cases, this requires a special resolution passed by members) virtual format, subject to safeguards on member participation and ability to ask questions orally or in writing. Electronic signatures, including of board minutes, and e-communication are also enabled on a permanent basis.

This is an important and overdue modernisation of Australia’s corporations law and has been a key priority for the AICD.

In a welcome step, the Australian Securities and Investments Commission (ASIC) has also recently extended temporary relief for companies to hold virtual AGMs in the first half of 2022, regardless of whether their constitution expressly provides this.

Listed companies have this extended relief until 30 May; unlisted ones (including NFPs) until 30 June, which will be welcome news for December year-end reporters. ASIC can also consider relief for virtual meetings on a case-by- case basis, if required.

The AICD has updated our Joint Guidance on AGMs (developed with the Law Council, Governance Institute and Australian Investor Relations Association) to reflect these changes.