Authored by Brian Wu
It has been a busy year for Owl Advisory by KWM and the King & Wood Mallesons Corporate Governance team. We have been helping clients with compliance and governance issues across a wide range of areas including financial regulation and climate-related disclosures. Below is a summary of the types of work we have been doing this year and common issues we have encountered.
Financial Regulation
The Financial Accountability Regime (FAR) commenced in March this year for banks. We assisted a number of banks to review their policies and procedures to enable them to implement the FAR, as well as manage risks arising under the FAR. We have also assisted insurance companies and superannuation entities to prepare for the FAR which commences for those entities in March 2025.
We have developed and reviewed policies and procedures to help clients comply with other financial regulation obligations such as market misconduct, anti-money laundering, design and distribution obligations, wealth management obligations, underwriting and custody.
Climate-related Disclosures
We have assisted clients reviewing their voluntary climate disclosures for the current year. However, climate disclosures will change significantly with the mandatory climate reporting regime commencing in 2025. In preparation for mandatory climate reporting, we have conducted gap analysis between voluntary disclosures and the mandatory disclosure regime, advised clients preparing for mandatory reporting including assessing liability exposures, and developed verification procedures for mandatory reporting.
We have also reviewed documents from clients to advise on greenwashing risks which has become a key area of enforcement action by ASIC.
Other Compliance and Governance Risk
Outside the above areas, we have reviewed general corporate governance and risk management frameworks. We have also reviewed a wide range of policies and procedures such as board and committee charters, continuous disclosure policies, risk management for transformation projects, delegation frameworks and anti-competitive practices.
Common Issues we have encountered
Across our work in the different areas this year, we have encountered some common issues including:
Risk management documents becoming outdated and not being reviewed for years;
Inadequate complaints management and internal dispute resolution procedures;
Reporting up the chain remains a challenge, although recent breach reporting requirements for AFSL holders have forced organisations to make some changes;
Record-keeping, especially of material decisions relating to risk management, is not consistent and is generally ad hoc; and
We have come across a wide variety of governance, risk and compliance systems, with many of them continuing to require significant manual inputs and maintenance.
For help with your compliance and governance needs, please contact Himashi Cameron (Head of Compliance Advisory, Owl Advisory by KWM) or Tim Bednall (Director, Owl Advisory by KWM). For assistance with managing your climate reporting obligations, please contact Michaela Aspell (Senior Climate Adviser, Owl Advisory by KWM).
This publication is a joint publication from King & Wood Mallesons, and KWM Compliance Pty Ltd (ACN 672 547 027) trading as Owl Advisory by KWM. KWM Compliance Pty Ltd is a company wholly owned by the King & Wood Mallesons Australian partnership. KWM Compliance Pty Ltd provides non-legal compliance and governance risk advisory services for businesses. KWM Compliance Pty Ltd is not an incorporated legal practice and does not provide legal services. Laws concerning the provision of legal services do not apply to KWM Compliance Pty Ltd.