ASIC urges combined crackdown on corporate misconduct

The corporate watchdog has urged governments around the world to work together to crack down on misconduct and hold major corporations accountable regardless of the country their boards are located in.

Australian Securities and Investments Commission (ASIC) chairman Joe Longo said he remained worried about the challenge of regulating transnational companies, such as social media platforms, that are based in other countries, and that it was time for governments to act.

“There are very significant parts of the economy that involve transnational and [social media] platforms, and when things go wrong it’s not so easy to hold those entities accountable,” he told The Age and Sydney Morning Herald.

“We might get information from a regulator from a different country … the problem though is that’s an incomplete situation. You need a political situation. You need a number of the key economies to co-operate with one another to impose a level of accountability – we’re not there yet.”

In a speech to ASIC’s annual conference in Melbourne on Tuesday, Longo also reiterated his commitment to clamping down on greenwashing by investment funds and targeting superannuation funds that do not act in the interest of its retiring members.

And he warned the regulator would act against organisations that do not reasonably invest in safeguarding against cyberattacks.

Longo, who was appointed ASIC’s chairman in June 2021, said while corporate Australia “fully acknowledged” the issues arising out of cybersecurity risks and artificial intelligence, it needed to meet community expectations by addressing the problems instead of putting shareholder profits ahead.

“Our primary job in the end is to administer the law, but very often the community expectation exceeds what the law requires,” Longo said. “[Organisations] have to put customers at the centre of what they’re doing; look at their reputation, reasonable community expectation and run the business with those considerations in mind.”

He added that ASIC had set its sights on organisations that are ill-prepared for cyberattacks, and would take legal action, including launching court proceedings, against board directors and executives who have not made sufficient investments in cybersecurity.