The regulation of corporate control in Australia: A historical perspective

Research output: Contribution to journalArticleResearchpeer-review

Abstract

As the process of financial and economic reform gains pace throughout the Asia-Pacific region, one important aspect that deserves the attention of business and legal analysts is the regulation of corporate control. The purpose of this paper is to describe and assess the evolution of corporate control regulation in Australia. With a government position paper on likely changes to Australian takeover law due to be released in the near future, it is appropriate and timely to reflect on the process of regulatory change that has given us our current system, so that lawmakers may avoid the errors and pitfalls of the past. This assessment of the process of regulatory change in Australia may also provide lessons for regulators in the Asia-Pacific region.

The current takeover legislation in Australia is the result of a series of overhauls and amendments since the introduction of the first national legislation in the Uniform Companies Act 1961. In 1971 there were considerable amendments to the legislation as a result of the recommendations of the Eggleston Committee’s review of company law. In the late 1970’s, a major review led to the passing of new legislation which became the Companies (Acquisitions of Shares) Act 1981 (CASA). With very few changes the provisions of CASA were encapsulated in Chapter 6 of the Corporations Law, which currently applies.

The process of regulatory change in relation to corporate control has been characterised by legislative amendments in reaction to anecdotal evidence and perceived changes in public opinion, and as a result of political compromise. It has also been characterised by an absence of attention to quality empirical evidence regarding the benefits of takeovers, and the economic effects of regulation. We now have a rather cumbersome system of takeover regulation which has two main problematic features. First, it is a hybrid of two systems of regulation: ‘black-letter law’, and a self-regulatory approach embodied in the Corporations and Securities Panel, overseen by the Australian Securities Commission (ASC). The issue of method of regulation - whether it should be by means of ‘black-letter law’ or self-regulation as exemplified by the British approach - has been a feature of the debate for almost thirty years. Second, there is considerable skewness in the regulations toward protection and equality of treatment of target shareholders. Fairness to target shareholders has been a common theme in the debate, and has directed much of the legislation.
Original languageEnglish
Pages (from-to)102-122
Number of pages23
JournalCanterbury Law Review
Volume7
Publication statusPublished - 1998

Cite this

@article{be3e16fc81134f8aacf0f20dc0403a0a,
title = "The regulation of corporate control in Australia: A historical perspective",
abstract = "As the process of financial and economic reform gains pace throughout the Asia-Pacific region, one important aspect that deserves the attention of business and legal analysts is the regulation of corporate control. The purpose of this paper is to describe and assess the evolution of corporate control regulation in Australia. With a government position paper on likely changes to Australian takeover law due to be released in the near future, it is appropriate and timely to reflect on the process of regulatory change that has given us our current system, so that lawmakers may avoid the errors and pitfalls of the past. This assessment of the process of regulatory change in Australia may also provide lessons for regulators in the Asia-Pacific region.The current takeover legislation in Australia is the result of a series of overhauls and amendments since the introduction of the first national legislation in the Uniform Companies Act 1961. In 1971 there were considerable amendments to the legislation as a result of the recommendations of the Eggleston Committee’s review of company law. In the late 1970’s, a major review led to the passing of new legislation which became the Companies (Acquisitions of Shares) Act 1981 (CASA). With very few changes the provisions of CASA were encapsulated in Chapter 6 of the Corporations Law, which currently applies.The process of regulatory change in relation to corporate control has been characterised by legislative amendments in reaction to anecdotal evidence and perceived changes in public opinion, and as a result of political compromise. It has also been characterised by an absence of attention to quality empirical evidence regarding the benefits of takeovers, and the economic effects of regulation. We now have a rather cumbersome system of takeover regulation which has two main problematic features. First, it is a hybrid of two systems of regulation: ‘black-letter law’, and a self-regulatory approach embodied in the Corporations and Securities Panel, overseen by the Australian Securities Commission (ASC). The issue of method of regulation - whether it should be by means of ‘black-letter law’ or self-regulation as exemplified by the British approach - has been a feature of the debate for almost thirty years. Second, there is considerable skewness in the regulations toward protection and equality of treatment of target shareholders. Fairness to target shareholders has been a common theme in the debate, and has directed much of the legislation.",
author = "Hutson, {Elaine Robyn}",
year = "1998",
language = "English",
volume = "7",
pages = "102--122",
journal = "Canterbury Law Review",
issn = "0112-0581",

}

The regulation of corporate control in Australia: A historical perspective. / Hutson, Elaine Robyn.

In: Canterbury Law Review, Vol. 7, 1998, p. 102-122.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - The regulation of corporate control in Australia: A historical perspective

AU - Hutson, Elaine Robyn

PY - 1998

Y1 - 1998

N2 - As the process of financial and economic reform gains pace throughout the Asia-Pacific region, one important aspect that deserves the attention of business and legal analysts is the regulation of corporate control. The purpose of this paper is to describe and assess the evolution of corporate control regulation in Australia. With a government position paper on likely changes to Australian takeover law due to be released in the near future, it is appropriate and timely to reflect on the process of regulatory change that has given us our current system, so that lawmakers may avoid the errors and pitfalls of the past. This assessment of the process of regulatory change in Australia may also provide lessons for regulators in the Asia-Pacific region.The current takeover legislation in Australia is the result of a series of overhauls and amendments since the introduction of the first national legislation in the Uniform Companies Act 1961. In 1971 there were considerable amendments to the legislation as a result of the recommendations of the Eggleston Committee’s review of company law. In the late 1970’s, a major review led to the passing of new legislation which became the Companies (Acquisitions of Shares) Act 1981 (CASA). With very few changes the provisions of CASA were encapsulated in Chapter 6 of the Corporations Law, which currently applies.The process of regulatory change in relation to corporate control has been characterised by legislative amendments in reaction to anecdotal evidence and perceived changes in public opinion, and as a result of political compromise. It has also been characterised by an absence of attention to quality empirical evidence regarding the benefits of takeovers, and the economic effects of regulation. We now have a rather cumbersome system of takeover regulation which has two main problematic features. First, it is a hybrid of two systems of regulation: ‘black-letter law’, and a self-regulatory approach embodied in the Corporations and Securities Panel, overseen by the Australian Securities Commission (ASC). The issue of method of regulation - whether it should be by means of ‘black-letter law’ or self-regulation as exemplified by the British approach - has been a feature of the debate for almost thirty years. Second, there is considerable skewness in the regulations toward protection and equality of treatment of target shareholders. Fairness to target shareholders has been a common theme in the debate, and has directed much of the legislation.

AB - As the process of financial and economic reform gains pace throughout the Asia-Pacific region, one important aspect that deserves the attention of business and legal analysts is the regulation of corporate control. The purpose of this paper is to describe and assess the evolution of corporate control regulation in Australia. With a government position paper on likely changes to Australian takeover law due to be released in the near future, it is appropriate and timely to reflect on the process of regulatory change that has given us our current system, so that lawmakers may avoid the errors and pitfalls of the past. This assessment of the process of regulatory change in Australia may also provide lessons for regulators in the Asia-Pacific region.The current takeover legislation in Australia is the result of a series of overhauls and amendments since the introduction of the first national legislation in the Uniform Companies Act 1961. In 1971 there were considerable amendments to the legislation as a result of the recommendations of the Eggleston Committee’s review of company law. In the late 1970’s, a major review led to the passing of new legislation which became the Companies (Acquisitions of Shares) Act 1981 (CASA). With very few changes the provisions of CASA were encapsulated in Chapter 6 of the Corporations Law, which currently applies.The process of regulatory change in relation to corporate control has been characterised by legislative amendments in reaction to anecdotal evidence and perceived changes in public opinion, and as a result of political compromise. It has also been characterised by an absence of attention to quality empirical evidence regarding the benefits of takeovers, and the economic effects of regulation. We now have a rather cumbersome system of takeover regulation which has two main problematic features. First, it is a hybrid of two systems of regulation: ‘black-letter law’, and a self-regulatory approach embodied in the Corporations and Securities Panel, overseen by the Australian Securities Commission (ASC). The issue of method of regulation - whether it should be by means of ‘black-letter law’ or self-regulation as exemplified by the British approach - has been a feature of the debate for almost thirty years. Second, there is considerable skewness in the regulations toward protection and equality of treatment of target shareholders. Fairness to target shareholders has been a common theme in the debate, and has directed much of the legislation.

M3 - Article

VL - 7

SP - 102

EP - 122

JO - Canterbury Law Review

JF - Canterbury Law Review

SN - 0112-0581

ER -