This is a service specifically targeted at the needs of busy non-executive directors (NEDs). We aim to give you a ‘heads-up’ on the things that matter for NEDs in the week ahead – all in just a few minutes.
In this edition, we discuss the findings of ASX’s Group Monthly Activity Report for January 2025, the interim stop orders placed on Green Planet Recycling Solutions Limited and the commitment by the Construction and Building Unions Superannuation Fund (Cbus) to undertake risk management and governance transformation amidst an investigation by the Australian Prudential Regulation Authority (APRA). We also discuss the smooth passage of Australia’s ‘world-first’ scam prevention legislation through Parliament.
In Over the Horizon, we discuss the tensions faced by directors of companies operating across the US and Australia as they seek to comply with competing diversity, equity and inclusion (DEI) mandates.
Regulatory
ASX publishes Group Monthly Activity Report for January 2025
On 6 February 2025, ASX published its Group Monthly Activity Report for January 2025. In a worrying trend, the number of companies listed on the ASX continues to decline, with 2,113 companies listed on the ASX in January 2025 compared to 2,187 in January 2024. The subdued initial public offering (IPO) market indicates that investors appear to have a larger appetite for private or follow-on investments over IPOs, and at the other end of the spectrum, robust merger and acquisition activity continues to lead to delistings. Despite this, there are signs of growth, with the ASX Capital Markets: 2024 year in review and 2025 outlook reporting a nearly three-fold increase in IPO activity from 2023, and a strong market for follow-on investment. ASX remarks that activity in 2025 is expected to increase on the back of increasing confidence around the macroeconomic environment.
ASIC places interim stop orders on Green Planet Recycling Solutions
On 17 February 2025, the Australian Securities and Investments Commission (ASIC) announced it had issued two interim stop orders on the public offer of redeemable preference shares by Green Planet Recycling Solutions Limited, an unlisted public company, to raise up to $20 million. The orders were made because the regulator was concerned that the prospectus for the offer was severely deficient and that a target market determination had not been prepared by the company in compliance with design and distribution obligations. This action is a reminder that ASIC remains focussed on enforcing compliance with the design and distribution provisions of the Corporations Act.
Cbus commits to risk management transformation amidst APRA investigation
On 11 February 2025, APRA announced that it had acted to address concerns raised in a recent prudential review of United Super Pty Ltd, the trustee for Cbus, including by accepting a court enforceable undertaking from Cbus to implement a comprehensive risk transformation program addressing risk management and related issues, and the publication of a rectification plan prepared by Cbus to address deficient governance and expenditure processes. The regulator has also commenced an investigation exploring potential breaches of the Superannuation Industry (Supervision) Act 1993 (Cth) by Cbus, with a focus on expenditure management processes. Cbus has acknowledged APRA’s concerns and has committed to developing an integrated rectification plan. APRA Deputy Chair, Ms Margaret Cole noted “[w]here an entity’s practices are found wanting, APRA will not hesitate to take action to protect members’ interests”, making it only clearer just how bright the regulatory spotlight will be set on superannuation funds in 2025.
Legal
Scams prevention legislation passed by Parliament
On 13 February 2025, the Scams Prevention Framework Bill 2025 (Cth) passed unamended through Parliament, marking a ‘world-first’ specific legislative attempt to combat scams, at least at a federal level. As discussed in G+T’s Insight article, the new Scam Prevention Framework (Framework) forms part of a broader effort to modernise Australia’s digital legal landscape, efforts that include the establishment of the National Anti-Scam Centre within the ACCC and the introduction of comprehensive penalties for failing to comply with the Framework. The Framework, among various other changes, empowers the ACCC to investigate potential breaches and take enforcement action where entities do not take reasonable steps to fulfill their obligations under the Framework. Banks, certain digital platforms (including social media) and telecommunications providers will be the first sectors required to comply with the Framework. The ACCC welcomed the passage of the bill, with ACCC Deputy Chair Catriona Lowe hailing it as “a critical step in the fight against scams — creating overarching principles that all members of designated sectors must comply with”. With businesses facing fines up to $50 million for failing to uphold their obligations, the time for directors to undertake reviews of any anti-scam systems is now, not later.
Over the horizon
International companies caught in DEI ‘tug of war’
In January 2025, US President Donald Trump issued various executive orders regarding DEI policies. By virtue of the executive order Ending Illegal Discrimination and Restoring Merit-Based Opportunity signed on 21 January 2025, President Trump has indicated the White House’s view that all DEI policies are ‘illegal’ and ‘discriminatory’, and that DEI principles should be excised from federal and private sector mandates, requirements, programs or activities. By 21 May 2025, each executive department and agency is to ‘identify [and report to the US Attorney General, and therefore the White House] up to nine potential civil compliance investigations’ of publicly traded corporations (amongst other entities) in relation to their DEI programs or principles which may ‘constitute illegal discrimination or preferences’. In stark contrast in Australia, on 13 February 2025, the Workplace Gender Equality Amendment (Setting Gender Equality Targets) Bill 2024 (Cth) had its second reading in the Senate. The Bill seeks to introduce new gender equality requirements for companies with 500 or more employees. If passed into legislation, such companies will require a certificate of compliance under the Workplace Gender Equality Act 2012 (Cth) (obtained by demonstrating progress with three selected gender equality targets over a three-year period) to secure certain government contracts. As the Trump administration’s approach to DEI marks a shift from the global norm, multinational companies with operations across the US and Australia will undoubtedly face compliance challenges in seeking to serve two masters with starkly different perspectives on the DEI debate.