The AICD's advocacy team represents the interests of members in public debate and to governments.
AICD supports a GST increase
The Australian Institute of Company Directors (AICD) has publicly supported the recent push for an increase in the GST.
AICD managing director and chief executive officer John Brogden says: “Tax reform is unfinished business in Australia. Governments need to listen to the broad cross section of the Australian community calling for a broader, fairer tax regime.”
Almost 80 per cent of AICD members supported a change to the GST in the Director Sentiment Index (DSI) carried out earlier this year.
The findings indicated that directors believe GST reform is the top priority for any comprehensive review of the taxation system.
The DSI found that, of those who support a change to the GST system, 30 per cent believe that the rate of GST should be increased and that the GST base should also be broadened.
Another 30 per cent believe that an increase in the GST rate is required but that it is unnecessary to also broaden the base of the tax.
The remaining 18 per cent believe that the GST base should be broadened without an increase in its current rate of 10 per cent.
Gender Bill examined
The AICD recently responded to Senator Nick Xenophon’s proposal for legislation requiring that women make up at least 40 per cent of government boards. The proposal formed part of the Australian Government Boards (Gender Balanced Representation) Bill 2015.
Increasing diversity, particularly gender diversity, on boards of all organisations has long been a key objective of the AICD.
Beyond being the right thing to do, a number of studies have demonstrated a positive link between the level of female representation on boards and improved corporate performance.
Earlier in 2015, we called for all boards to ensure that 30 per cent of their directors are female and urged S&P/ASX 200 companies to meet this new target by the end of 2018. In setting this new numerical target and an ambitious time frame for ASX 200 companies to achieve it, the director community is challenging itself to meet a higher standard than currently exists.
While we strongly agree with the need to increase the number of women on government boards, we oppose the introduction of legislation that mandates the number or percentage of women that must be appointed to a board.
As a general proposition, we are of the view that mandated standards of corporate governance result in a “one-size-fits-all” approach which should be avoided wherever possible. AICD remains strongly committed to its call for all boards, to be at least 30 per cent female, without the need for legislation.
Allco judgment a good one
A recent judgment in the Blairgowrie Trading Ltd and Anor v Allco Finance Group Ltd case in the federal court has once again shone the light on shareholder class actions in Australia.
The applicant in the Allco class action was refused the right to create a so-called common fund at the early stages of the proceeding because the only rationale for seeking it was to ensure the commercial viability of the court action for the litigation funder.
The funder had been unable to sign up enough people to make its legal action financially worthwhile, so sought permission to be given a percentage of any sum awarded to all shareholders – not just those who had signed an agreement with the funder.
Sensibly, the court refused. Entrepreneurial litigation funders with a profit motive often pursue actions under the guise of seeking “access to justice” for ordinary people. The Allco judgment shines a light on this issue and puts the interests of ordinary shareholders first.
Any law reform in this area should start by requiring litigation funders to be licensed as recommended by the Productivity Commission.
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