The Australian Institute of Company Directors’ Louise Petschler provides a monthly round-up of the Advocacy team’s projects.

    Crowd-sourced equity funding

    The AICD supports the proposed extension of the new crowd-sourced equity funding model to proprietary companies. Crowd-sourced funding allows a large number of individuals to make a small investment in a company – up to a maximum of $10,000 per annum per person and $25,000 per person for all time – in exchange for equity. The federal government has already passed legislation establishing a crowd-sourced funding regime for public companies.

    The AICD supports regulatory reform to support crowd-sourced equity funding by smaller firms.

    However, we also support stronger investor protections including requiring audited financials. We’ve recommended the federal government conduct a review in three years to ensure the scheme is operating fairly and effectively and to address any investor protection issues. Contact our policy adviser Matthew McGirr for more detail at

    Remuneration reporting

    Remuneration disclosures are a hot topic during annual general meeting season. While the quantum of remuneration hits the headlines, the disclosure reports themselves can often be confusing and misunderstood. Our latest Director Sentiment Index showed 46 per cent of directors consider public company remuneration reports to be inadequate.

    There are many issues at play including complicated remuneration structures, inconsistency and repetition in different laws and standards, and variable quality reports.

    The AICD recently held roundtables with remuneration committee chairs, asset managers, institutional investors, PwC and the Group of 100, drawing on the PwC/G100 report Streamlining Remuneration Reporting issued in December 2016.

    Themes coming out of the roundtables included:

    • The need for legislative reform to remove duplication.
    • Demand for better communication of the link between a firm’s strategy and remuneration practices.
    • Cross referencing and links to avoid duplication and remove static data from physical reports.
    • Need for greater clarity on options and fair value disclosures.
    • A preference for legislation to be framed around objectives rather than mandated lists of disclosures.

    Contact senior policy adviser Kerry Hicks at for more information.

    Financial reporting for non-listed entities

    The Australian Accounting Standards Board (AASB) intends to change the financial reporting disclosure requirements for non-listed companies that are ‘reporting entities’ – called Reduced Disclosure Requirements (RDR).

    The AASB hopes the changes will improve the low take-up of RDR.

    The AICD does not support the proposed changes. We don’t believe that the benefits of changing the RDR will outweigh the costs.We have recommended that changes should be:

    • Evidence-based, identifying the users and what their needs are (for example, user needs may differ between NFP and for-profit contexts).
    • Accompanied with a broader review of the financial reporting – involving consideration of who is to prepare a financial report and the type of financial report required.

    In the AICD’s view, a broader review would include for-profit and NFP financial reporting thresholds. For more information on our work, contact our senior policy adviser Kerry Hicks at

    Insolvency safe harbour reforms progress

    Reforms to introduce a safe harbour for directors under Australia’s insolvency laws are progressing. The reform Bill is under review by the Senate. The AICD supports its passage.

    The reforms aim to support directors seeking to turnaround viable companies facing financial distress, saving value and jobs. The AICD’s submission to the Senate inquiry sets out a strong case for this vital reform (see In a positive step, the Bill received bipartisan support in the House of Representatives, with the federal opposition acknowledging that ‘the intent of this legislation is to ensure that directors who honestly and diligently seek to turn around a business are not penalised for doing so.’

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