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As it happened: Unemployment rate falls to six-month low as more people find work, US Federal Reserve likely to cut rates by June

The head of Australia’s corporate watchdog has delivered a strong message for Australian company directors complaining about higher regulatory burdens, telling them to act with honesty and integrity.

“Being a director is a tough gig,” ASIC chairman Joe Longo said in a keynote speech at the Australian Institute of Company Directors (AICD) governance summit.

“You have to get the balance right: You have to put customers’ interests first, show them you’re not just there to make a profit, that you are acting with integrity, that you are doing the right things by your staff and by your local community.

ASIC chairman Joe Longo is giving tough love.(Supplied.)

“Absolutely that’s hard work. But with an attitude of curiosity about your businesses, it’s not impossible.”

He acknowledged there had been an increase in the demands on directors over time but said: “Spoiler alert – I’m going to say it’s not impossible to comply.”

“It’s tough love but being a director isn’t easy – if it were, anyone could do it.”

There are over 3 million companies in Australia – public and private, large and small, family businesses, start-ups, and not-for-profits.

“The directors who run those companies operate in a complex and high-stakes environment, characterised by an array of sometimes labyrinthine statutory obligations, significant community, social and ethical expectations, and a dynamic and evolving set of challenges and risks to manage,” Mr Longo said.

“….I think everyone would agree that asking directors to act with care, diligence, and integrity shouldn’t be too tall an order.”

He noted new challenges from geopolitics to generative AI and digitisation to sustainability.

“Investors have a right to know what they are investing in and, if ESG is driving their investment decision making, they will want to know their money is being invested in products and projects that genuinely support sustainability,” he said.

“Which means directors need to respond to the calls for transparency and disclosure in this area.”

“Yes, new climate-related reporting requirements will impose new obligations on directors and reporting entities. But they also create opportunities.”

The same was true of increased scrutiny of cyber preparedness.

“Because a major attack could destroy or at least erode consumer confidence in your company, being better prepared and more cyber resilient can only be a benefit,” he said.

“But also, as with climate disclosure, if directors, in general, have to be more focused and deliberate about cyber preparedness, this should also shore up the cyber resilience of associated entities like third-party suppliers.”

If directors act with “honesty and integrity, you’re probably avoiding improper use of position or information, and you’re probably disclosing interests that are relevant”, he said.