The controversy surrounding the tax advice expenses of Australian Securities and Investments Commission chair, James Shipton, is shaping at the catalyst for a fundamental change to the governance structure of ASIC with the possible imposition of a non-executive board.
A hearing of the Senate Joint Committee on Corporations and Financial Services has openly canvassed recommending to the Government changes to the management structure of ASIC which would significantly curtail the powers currently assigned to the role of chair.
The chairman of the Parliamentary Committee, Victorian Liberal back-bencher, James Paterson questioned by external experts such as former Australian Competition and Consumer Commission chairman, Professor Graeme Samuel and economist and academic, Professor Ian Harper, on what would represent a better governance structure for the regulator.
Paterson also questioned the current acting chair of ASIC, Karen Chester about the adequacy of the regulator’s existing governance structures in circumstances where she acknowledged that key information regarding the payment of $118,000 in tax advice for Shipton had not been fully communicated to either herself or other commission members.
He asked Chester whether, in the circumstances of what had occurred, ASIC’s governance structure was “inherently flawed”.
Chester had earlier told the committee that the ASIC commissioners had not had full visibility on the expenses issues impacting Shipton and ASIC’s deputy chair, Daniel Crennan, and described what information had been provided to the commissioners as “opaque”.
Paterson asked whether Chester believed that responsibility rested with Shipton with her responding that if she and the other non-recused commissioner had had full visibility she would not have been appearing before yesterday’s committee hearing explaining the situation.
The committee will report its findings to the Government including recommendations around the imposition of an external board structure on the regulator.
