Company law reactionary and dated

Tom Ravlic

Pushed by COVID, the Federal Government has stumbled into the 21st century and is proposing changes in company law to allow virtual meetings for companies and clarity around electronic signatures.

It is a fascinating situation to observe because technology to hold virtual meetings across jurisdictions has been available for some time, but the law has been sluggish to adapt.

What the current proposed legislation that is up for consultation on the Treasury website does is bring legal requirements for companies into line with what the government was forced to grapple with when the pandemic took hold.

Companies would be able to hold meetings in a physical location or use virtual means to do so without getting any kind of special relief from government.

Why on earth has all this taken so long?

An obvious answer is that priorities in legislating dictate which technocratic rewrites of the statutee line a spin through parliament. This area of law was due to be updated; COVID has turned it into a priority.

Another issue that infects the legislative process is that there is almost always a regulatory lag with technology irrespective of what area of government the conversation may be about.

Consider the challenges facing tax experts in the space of so-called cryptocurrencies. The nature of these digital forms of exchange has caused havoc for legislators, regulators, counterterrorism experts, and others because these new technologies are being used by people wanting to play in the shadows.

The technology is agnostic. It is itself not good nor bad. It exists but at times people allow technologies to grow and mature of their own accord without moving more quickly to examine how bad actors can use them.

It is the same with encrypted messaging apps. People use them to stay in touch with family and friends but there are others that use them to disseminate tips on how to defraud banks and online shops.

The latter example still plays out online with channels that flog tips on committing fraud still alive despite some of them either being booted off or unpublished by their owners for fear of detection.