The 2008 financial crisis and its outworking has severely shaken confidence in liberal economic theory and policy – and in liberal capitalism more generally. The costs associated with the privileging of the politics of austerity, combined with ongoing concern about the capacity of the sovereign to manage accrued private sector debt, have produced ‘wicked’ problems of acute social, corporate and legal complexity. What should constitute the limits of state intervention and on what basis should it be legitimated? What lessons can Australia learn from the experience of other Anglo-Saxon countries in terms of what caused or can ameliorate the initial crisis? Can solutions be limited to technical matters alone? If not, on what basis can or should reform be legitimated?

Directors Duties After Centro

16 September 2011

The holding of the Federal Court that Centro directors had breached the Corporations Act as a consequence of their failure to note or understand deficiencies in the presentation of 2007 consolidated financial statements, which were subsequently restated, has major implications for directors, auditors and their legal advisers. Influential corporate law scholars from the United Kingdom and the United States joined some of the most influential auditors, legal practitioners and regulatory officials in the country as well as representatives from the peak director and accounting associations. Key questions addressed included: What constitutes knowledge or literacy of complex financial operating matters Do all need directors need to have an accounting qualification? Does financial literacy negate board diversity, particularly in not-for-profit sector? What are the limits of reliance and what constitutes reasonable trust? What procedures should an audit committee introduce to ensure reasonable enquiry? How is a board to resolve the conflict between purpose of external audit as verification or as manufacture of financial records? Is there a need to reconfigure the relationship between the auditor and the board? The Keynote presentiation was provided by Nelinda Gibson, Deputy Chairman of the Australian Securities and Investments Commission 

The Future of Prudential Regulation in Superannuation

29 April 2011

The disclosure and governance challenges facing the superannuation sector are exceptionally complex. The specific design of the workshop focussed on the recommendation by the Review into the Governance, Efficiency, Operation and Structure of the Superannuation System (the ‘Cooper Review’) that APRA be given the power to issue prudential standards for the superannuation system, a recommendation endorsed by the government in its recent Stronger Super announcement. It also sought to showcase the evolution in scholarship in Australia and overseas with respect to financial regulation, the role of self and co-regulatory bodies and the linkages between financial services and superannuation (pensions) regulation. The workshop therefore addressed such questions as: How does regulating the superannuation system contribute to positioning Australia as a leading financial centre in our region? What precisely does ‘prudential‘ regulation mean in a system dominated by DC schemes? What role does or should professional and industry bodies play in the regulatory framework?

Delivering Investor Protection Across the Value Chain

16 November 2010

Building on the success of the operating model used in the first workshop, this workshop focused on the need to increase market integrity across the value chain, with a particular focus on the Future of Financial Advice project. The critical issue addressed was whether the ASIC proposal to impose a fiduciary-like standard on the financial advice industry was either appropriate or workable. The workshop was provided with a presentation from Greg Medcraft, the ASIC Commissioner charged with managing the FOFA project. This was then subject to robust critique from a panel of legal experts, including Steve Mark of the Office of the Legal Services Commissioner, Ashley Black, a litigation partner at Mallesons and Judge Kevin Lindgren. This was followed by presentations by Martin Fahy of FINSIA and Dr Deen Sanders of the Financial Planning Association on how industry associations are enhancing standards. A third component of the workshop focused on the challenge facing regulators, with a presentation from John Trowbridge highlighting potential problems with the Twin Peak model, particularly over the superannuation system.

Operationalising the Regulatory and Governance Dimensions of the Johnson Report

3 August 2010

The workshop was designed to focus on the regulatory and governance challenges set down by Mark Johnson in his report calling for substantive action to be taken to advance the strategic role of developing Australia as a regional financial centre. The vision articulated by the Johnson Report centred on the need to nurture a sector that is ‘open, competitive and underpinned by strong, stable and sound institutions. It exhibits the lowest possible barriers to entry consistent with the maintenance of financial stability and integrity, so as to encourage new entrants and foster price competition and innovation. It is a sector with a reputation for transparency, integrity and efficiency.’ This is an exacting standard. Determining whether Australia meets it is an empirical question and is central to the research project. The workshop identified a series of substantial weaknesses across the regulatory framework and a lack of agreement within the legal and accounting communities as to what constituted integrity. An academic panel articulated a framework for integrating integrity into regulatory design, which was particularly well received by participants. This was then developed and presented at the second workshop on 16 November.