Governance Institute says ‘bring back CAMAC’
The Federal Government’s public consultation on the draft Bill to abolish the Corporations & Markets Advisory Committee (CAMAC) must consider the option of retaining the highly respected body that has been a powerhouse for intelligent, effective and practical corporations and financial markets reform for 24 years, says Governance Institute of Australia.
Governance Institute’s national director policy, Judith Fox said that while the axing of CAMAC was part of the government’s 2014 Budget measures to cut costs and streamline bureaucracy, abolishing the body would ironically result in corporate Australia having to shoulder the far greater costs and senseless ‘red tape’ associated with poor quality regulation.
“There’s a lot at stake in losing CAMAC”, Ms Fox said. “Corporations and the financial markets are the lynchpin of Australia’s economy. If they do not function efficiently, there will be detrimental consequences for business, investors and the capital markets.
“Having an expert, research-focused, consultative and independent body like CAMAC to develop and advise the government on best practice policy has made a significant contribution to the strength and efficiency of our corporate and financial institutions. It has avoided knee-jerk, politically-motivated regulation that can be very damaging to the economy”.
In addition, Ms Fox pointed out that as a cost-saving measure, abolishing CAMAC was difficult to understand. “CAMAC convenes a part-time panel of corporate law luminaries who for all intents and purposes volunteer their time. It is supported by three staff at an annual cost of $1 million. It’s a small body that punches well above its weight and delivers economic benefits that greatly outweigh its funding costs — such as our high standards of corporate governance and a stable and efficient environment for corporate activity. These things are easy to take for granted but will be deeply missed when they are gone,” Ms Fox said.
CAMAC has distinguished itself for developing practical policy and regulation on a wide range of issues including enhancements to continuous disclosure, managed investment schemes, executive remuneration, related party financial transactions, statutory derivative actions to empower shareholders, and many more.
The body has also been at the forefront of cutting-edge policy with its most recent projects including recommendations to facilitate crowd-sourced equity funding and reforms to modernise the AGM to better engage retail shareholders. Regrettably, CAMAC’s AGM review was discontinued following the Budget announcement and transferred to Treasury with no update since on the project’s future. And so corporate Australia will continue to be hobbled by an outdated, costly and inefficient institution which meets no one’s interests — neither shareholders nor companies.
“Corporate and financial activity is dynamic by nature. That means reform must also be ongoing to keep up with new challenges. The need for CAMAC is just as compelling today as when it was first established”, Ms Fox said.
“CAMAC is a lean, efficient and highly-regarded organisation that has improved our corporate institutions over the past two decades and continues to have a vital role to play in the decades ahead. Corporate law reform cannot stand still. Bring back CAMAC”.
Submissions on the exposure draft Bill to abolish the Corporations and Markets Advisory Committee close on 24 October 2014.
For further information contact Su Lin Ho at CallidusPR on (02) 9262 9295 or 0421 616 617 or Judith Fox on (02) 9223 5744 or 0408 667 248.
About Governance Institute of Australia
Governance Institute of Australia is the only independent professional association with a sole focus on the practice of governance. We provide the best education and support for practising chartered secretaries, governance advisers and risk managers to drive responsible performance in their organisations.