Australian Securities and Investments Commission (ASIC) chair Joe Longo (pictured) addressed key corporate governance issues during his speech at the Australian Institute of Company Directors (AICD) Governance Summit on March 12.
His remarks focused on regulatory complexity, the evolving responsibilities of company boards, and the unchanged obligations of directors under Australian corporate law.
Longo said that businesses and regulators alike face increasing challenges due to complex and overlapping regulations.
He noted that excessive regulatory burdens can hinder compliance, create inefficiencies, and make enforcement more difficult. In response, ASIC has formed a Simplification Consultative Group, comprising representatives from business, consumer advocacy, and industry bodies, including the AICD, the Business Council of Australia, and the Consumer Action Law Centre.
ASIC expects to release a discussion paper later in 2025 based on insights from the consultative group, with the goal of making regulatory guidance more accessible and practical for businesses and directors.
“Change, as they say, starts at home. And the first thing we want to consider is what we at ASIC can change about our approach. This is important because it puts the question squarely in terms of what’s in our power,” Longo said.
Longo said that the initiative does not signal a shift toward deregulation but rather an effort to refine regulatory processes to ensure they remain effective and proportionate. According to recent AICD surveys, legal and regulatory compliance remains a top concern for Australian directors, alongside economic conditions and cybersecurity risks.
Longo also addressed the composition of corporate boards, pointing to an imbalance in the skill sets represented among directors. He cited industry data showing that while financial and legal expertise is well represented in boardrooms, directors with backgrounds in technology and data governance remain a minority.
“There isn’t a single material issue currently facing business – and our institutions more generally – that doesn’t require data, systems, technology, and processes to effectively address. For evidence of this, you need only look at major AICD publications in the past year on cyber security, AI governance, and mandatory climate reporting,” he said.
He also stressed that governance responsibilities extend beyond compliance. Directors must take an active role in assessing risks, questioning management decisions, and ensuring that boards have access to clear, relevant information, he said.
ASIC has maintained a focus on director accountability, with enforcement actions taken against multiple company officers in the last quarter of 2024.
The regulator disqualified four directors and prosecuted 58 individuals for 107 offences, including misleading financial reporting, failure to provide company records to liquidators, and other breaches of corporate law.
ASIC reported that $342,400 in fines were issued for non-compliance with reporting obligations, particularly cases where directors failed to assist liquidators in recovering assets. The regulator reminded directors of their legal duties under the Corporations Act 2001, which allows for bans of up to five years for individuals involved in multiple company failures.
While regulatory structures may evolve, Longo emphasised that the fundamental responsibilities of directors remain unchanged. Directors must continue to act in good faith, prioritise the interests of their companies, and ensure proper oversight of financial and operational risks.
ASIC plans to issue further reports on governance practices in the coming months, with a particular focus on superannuation and regulatory simplification. The regulator encouraged directors to remain proactive, seek professional advice when needed, and ensure governance frameworks align with legal obligations and business sustainability.
