Indigenous Corporate Governance targeted for major reform
Minister for Families, Community Services and Indigenous Affairs, Mal Brough, today welcomed the passage of legislation which will deliver modern corporate governance standards to around 2,500 Indigenous corporations.
When it commences on 1 July 2007, the new Act will replace the Aboriginal Councils and Associations Act 1976 (ACA Act), which is now 30 years old and has failed to keep pace with developments in company law and accountability requirements.
Existing corporations will automatically be registered under the new Act. There will be a transitional period of up to two years for them to make changes necessary to comply.
"The new arrangements will be strong and flexible," Mr Brough said. "We will remove a lot of red tape for smaller corporations, which will have more straightforward reporting requirements. But there will be more stringent reporting requirements for larger corporations."
Extensive consultations were undertaken with Indigenous communities all over Australia during a comprehensive review and in developing the legislation.
"Aboriginal and Torres Strait Islander people strongly supported more rigorous accountability for managers and directors. CEOs who were previously able to escape scrutiny will now be made accountable for their actions," Mr Brough said.
"Any regulatory gap between the operations of the Corporations Act and the ACA Act will be closed – this will help stop the unscrupulous behaviour of some individuals. A new register of disqualified directors, CEO’s and senior staff will be established."
Powers for the Registrar to appoint special administrators will ensure that important services can continue when they are put at risk through corporate failure.
Corporations will be able to recruit non-Indigenous experts to serve as board members.
The Minister was keen to reassure Aboriginal and Torres Strait Islander communities and corporations that assistance would be provided to ensure a smooth transition.
Funding was provided in this year’s Budget for training in the new arrangements.
The taxpayer can expect better value from government expenditure and Indigenous Australians can expect better quality services from their organizations.