Background to Review
On 4 March 1997 the Treasurer announced that, as part of the Government's new Corporate Law Economic Reform Program (CLERP), papers on key areas of corporate law policy which affect business and market activity would be released.
- reviews whether the current rules regulating company directors inhibit sound business judgements;
- examines whether shareholders have sufficient opportunity for redress against a corporation;
- explores whether the private sector is adequately addressing the issue of corporate governance in light of the importance of domestic and international confidence in Australia's securities markets; and
- makes specific recommendations for amendment of the Corporations Law.
The proposals contained in this paper have been developed in consultation with the business community, in particular, the Government's Business Regulation Advisory Group, see Appendix A.
Key Economic Principles
As with other key corporate law policy areas which the Government has identified in CLERP, the proposed reforms have been assessed against the following key principles:
- cost/benefit of proposals as against the existing law;
- the development of a regulatory and legislative framework that is consistent, flexible, adaptable and cost effective;
- the reduction of transaction costs for firms and market participants; and
- an appropriate balance between government regulation and industry self regulation.
Enquiries concerning this paper and its implementation can be made to:
Corporate Governance and Accounting Policy Division
Telephone: (02) 6263 3154