AICD submission into establishing External Reporting Australia’s standard-setting boards

In our submission, we highlighted our support of the establishment of the ERA and its objective to effectively oversee high-quality corporate reporting, including the development of internationally aligned standards. The AICD’s submission built on our views expressed in our earlier submissions and referenced our work with Mandala Partners on the cumulative impact of the weight and complexity of federal regulation. In the report The Stagnant Nation: Lifting Australia's Dynamism, we recommended adopting the Productivity Commission’s recommendations under its Creating a more dynamic and resilient economy inquiry to improve the quality of federal policy making processes (Recommendations 2.1 – 2.4)

The key points in our submission were:

• Consultation: We strongly recommended the forthcoming ERA Due Diligence Document include a requirement for minimum stakeholder consultation periods (for example, four weeks) and appropriate implementation lead periods (for example, two years), with longer periods for major standards with greater technical complexity and regulatory impact.

• Proportionality: We recommended the Explanatory Statement and ERA Due Process Document include ‘proportionality’ in addition to guiding principles of consultation, transparency and accountability. As part of the Government’s Regulatory Reform Agenda, we also encouraged the Government and ERA to conduct a periodic assessment of opportunities to improve regulatory efficiency, which may include consideration of consolidating or reviewing standard-setting board functions to ensure the new governance and structural arrangements continue to remain fit-for-purpose.

• Analysis of collective stock of standards: We also recommended that the ERA Due Process Document includes obligations for the boards to complete a comprehensive analysis of the collective stock of accounting, auditing and assurance, and sustainability standards at periodic intervals, in line with the Government’s revised Impact Analysis Framework.