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 enforcement priorities announced by the Australian Competition and Consumer Commission (ACCC) for 2025, the decision of the ASX Corporate Governance Council (Council) to not implement the fifth edition of the ASX governance principles focused on diversity, equity and inclusion reporting (DEI) and the application received by the Takeovers Panel in relation to the affairs of Invest Blue Pty Ltd (Invest Blue).
In Over the Horizon, we discuss the Reserve Bank of Australia’s (RBA) long awaited decision to cut the cash rate in the context of a politically charged market.
Regulatory
ACCC prioritising consumer protection and market fairness in 2025
On 20 February 2025, the ACCC announced its enforcement priorities for 2025-26, which include misleading pricing, misuse of market power and unfair contract terms. In seeking to safeguard consumers and small businesses, the ACCC’s priorities align closely with the Australian Securities and Investment Commission’s enduring focus on enforcement action which promotes consumer protection, as discussed in a previous edition of Boardroom Brief. Balanced with the focus on consumer protection and fair trading concerns is the ACCC’s spotlight on environmental claims and sustainability, with a new emphasis on greenwashing, as it endeavours to encourage greater market competition, which ACCC Chair Ms Gina Cass-Gottlieb says, “promotes higher growth rates, higher household incomes and a strong Australian economy”. These initiatives underscore the importance of regularly reviewing compliance policies to ensure business practices align with both regulatory standards and public expectations.
ASX abandons plan for expanded DEI reporting obligations
On 20 February 2025, the ASX Corporate Governance Council announced it had closed its consultation period on the draft fifth edition of the ASX Corporate Governance Principles and Recommendations, with the fourth edition to remain in effect without change. This follows a divisive vote which saw eight of the Council’s 19 members opposing the implementation of the draft fifth edition, including the ASX itself, one of the Council’s five key members. The draft fifth edition was first released for consultation back in February 2024 (see previous edition of Boardroom Brief) and included updated recommendations regarding DEI disclosures, such as personal diversity disclosures from directors. Despite a majority of council members being in favour of the new standard, ASX Corporate Governance Council Chair Ms Elizabeth Johnstone stated that “a broad consensus on a suitable Fifth Edition would not be possible at this point in time”. Council members have indicated that the ASX’s position to not proceed was “decisive in killing the plan”. See article. The Council’s decision is the latest example of the tension gripping companies caught in the wider global backlash against DEI initiatives being encouraged by a White House led by President Trump, as discussed in a previous edition of Boardroom Brief.
Legal
Takeovers Panel receives application in relation to the affairs of Invest Blue
On 18 February 2025, the Panel announced that it had received an application from former Invest Blue shareholder, Kanenaro Pty Ltd ATF Denaro Family Superannuation Fund (Kanenaro), regarding the affairs of Invest Blue. In August 2023, Ironbark Investment Partners Pty Ltd (Ironbark), a holder of approximately 40% of the shares in Invest Blue, offered to acquire all issued shares in Invest Blue pursuant to a share purchase agreement. Kanenaro submitted to the Panel that:
1 At the time of the offer, Invest Blue was an unlisted company with more than 50 members for the purposes of Chapter 6 of the Corporations Act and failed to comply with its requirements in respect of the merger with Ironbark; and
2 The circumstances are unacceptable having regard to the impact on control of Invest Blue and the ability of Invest Blue shareholders to assess the merits of the proposal.
Alternatively, Kanenaro submits that, if the Panel determines that Invest Blue was not a Chapter 6 company, that Invest Blue’s actions prior to the merger constituted unacceptable circumstances, including instructing several employee shareholders to transfer their shareholdings into a bare trust arrangement. Kanenaro is seeking final orders that would unwind the transaction. A sitting Panel has not yet been appointed, and no decision has been made on whether to conduct proceedings.
Over the horizon
RBA’s cautious rate cut – the beginning of the end for inflation or the eye of the storm?
On 18 February 2025, the RBA announced its much anticipated decision to lower the cash rate by 25 basis points from a 13-year high of 4.35% down to 4.10. In a media address, RBA Governor Ms Michelle Bullock stated that this pre-election rate cut, the first since November 2020, is a sign that the RBA has some confidence that inflation is moving sustainably towards the midpoint of the 2-3% target range. However some upside risks remain including a tighter than expected labour market. Ms Bullock made clear that while the policy decision “recognises the welcome progress on inflation, the [RBA] remains cautious on prospects for further policy easing”. Commonwealth Treasurer Dr Jim Chalmers welcomed the rate cut, noting it as a step towards the Government's economic goals, while also stressing the Government’s ongoing focus on cost of living. The RBA’s Statement of Monetary Policy of February 2025 highlights uncertainties affecting the economy, citing the challenges brought about by higher tariffs between the United States and other major economies and ongoing geopolitical tensions. Despite the suggestion that “the worst of the inflation challenge is behind us”, some commentators have criticised the RBA’s decision as a premature attempt at a short-term fix, one that could exacerbate the cost-of-living crisis by adding inflationary pressure in the long run. While the RBA has all but ruled out another pre-election interest rate cut and emphasised that “politics does not enter the conversation”, greater alignment between fiscal and monetary policy will clearly be required for Australia to successfully navigate global economic and political challenges throughout 2025.