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REGULATORY FRAMEWORK

ASX principles:

CLERP 9:

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The Australian legal framework for corporate governance is provided by a variety of common law rules, regulatory practices, stock exchange rules and legislative provisions. Probably the most important of these elements are the statutory provisions found in the Corporations Act 2001. These have been enacted by the Australian Parliament after a decade of constitutional struggle between the Commonwealth and the States, with each seeking to determine who had primary legal responsibility for this area. These statutory provisions have actually evolved over many years and they have only very recently assumed their present form as part of a national body of legislation passed by the Commonwealth Parliament.

The regulatory framework for corporate governance and directors' duties is governed by the following:

  • Statute (notably the Corporations Act 2001).
  • Common law rules (for example, cases relating to directors' duties).
  • The company's constitution.
  • Guidelines issued by the Australian Securities and Investments Commission (ASIC) (known as Practice Notes and Policy Statements). These guidelines, although informal, do comply with the Corporations Act and so contraventions of these guidelines may also result in breaches of Australian company law.
  • If the company is a listed entity, the ASX Listing Rules (Listing Rules) as published and governed by the Australian Stock Exchange (ASX) provide guidelines on issues such as disclosure.
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