Good points in Companies Amendment Bill – expert

Legalbrief Today

Stephen Kennedy-Good, a director at Norton Rose Fulbright, has reportedly told Fin24 that corporates need to be aware of how some of the proposed changes to the Companies Amendment Bill – for which the deadline for comments has been extended to 14 December – will affect them. Among other things, it is proposed that remuneration and other benefits received by ‘prescribed officers’, in addition to directors, must be disclosed. ‘The net is cast wider. Each individual must be named. Shareholders and stakeholders want to know. This is a good thing for greater transparency,’ said Kennedy-Good. The directors will also have to prepare a directors’ remuneration report for presentation to shareholders at the annual general meeting. Currently any financial assistance granted by a company to its subsidiary must be authorised by the board and the shareholders by way of a special resolution. The proposed Bill ‘sensibly’, in Kennedy-Good's view, proposes that the special resolution requirement should not apply where a company gives financial assistance to its own subsidiary. ‘Where you have a responsible board of directors that governs well, I think this proposal will be a good change as it addresses day-to-day needs of companies,’ he reportedly told Fin24. ‘Rogue boards of directors could, however, abuse this, but shareholders could maybe build a relevant provision into the founding document.’ Kennedy-Good pointed out that the proposed change would not apply to ‘brother or sister companies’ in a broader group structure.

Full Fin24 report