Navigating the Regulatory Landscape

Welcome to the sixth and final article in our series on council-owned corporations. In this article, we discuss the legislation and regulations that all council-owned corporations should consider.

Operating in both the public and corporate spheres, council-owned corporations occupy a unique position in Australia’s regulatory environment. They are expected to perform commercially, generate public value, and uphold the high standards of transparency, accountability, and integrity that underpin local government. Navigating this dual framework requires a clear understanding of the intersecting legal obligations under the Corporations Act 2001 (Cth), the Local Government Act 2009 (Qld), and other state-based legislation.

An effective council-owned corporation must not only comply with these requirements but also embed them into its governance framework and culture. This means developing practical compliance tools, clear policies, and transparent reporting mechanisms that demonstrate both commercial discipline and public accountability.

Understanding the Legislative Framework

At the core of the regulatory landscape the two key pieces of legislation are the Corporations Act 2001 (Cth) (Corporations Act) and the applicable local government legislation (such as the Local Government Act 2009 (Qld)).

The Corporations Act sets out directors’ duties, financial reporting obligations, and corporate governance standards applicable to all Australian companies, including council-owned corporations.

Local government legislation establishes the principles of transparency, accountability, and effective governance that guide all local government entities.

A council-owned corporation must operate in compliance with both, meaning directors and officers need to understand their dual obligations, as company officers under the Corporations Act and as stewards of public resources under the local government framework.

Reporting and Disclosure Obligations

Transparency is central to a council-owned corporation’s accountability. Under the Corporations Act , council-owned corporations must prepare audited financial statements and meet statutory reporting requirements. At the state level, local government legislation defines additional disclosure obligations. Other states have similar mechanisms, such as corporate plans, annual reports, or strategic plans, which serve the dual purpose of providing accountability to the council and the community while clarifying operational priorities.

Publishing key performance indicators, compliance updates, and sustainability outcomes further reinforces transparency and builds community confidence. This approach is consistent across Australia, reflecting the growing expectation that public entities operate openly while delivering efficient and commercially viable outcomes.

Audit and Risk Committees

Audit and risk committees are an essential feature of good governance. They support the company’s board in overseeing financial reporting, risk management systems, and internal and external audits.

Queensland legislation, via the Auditor-General Act 2009 (Qld), outlines specific expectations for audit processes, but the broader principles such as independence, competence, and clear reporting lines, apply across all Australian jurisdictions. Committees monitor compliance, internal controls, and risk management, ensuring that both statutory and operational risks are appropriately managed.

Conclusion

Operating a council-owned corporation within Australia’s complex regulatory environment requires strategic alignment between corporate governance, public accountability, and community outcomes. By understanding the intersection of the Corporations Act, local government legislation, and ethical governance standards, councils can establish entities that are both commercially effective and publicly trusted.

Queensland’s framework provides a useful example of how clarity in governance, structured reporting, and robust risk oversight can set a strong foundation for success. However, the same principles apply Australia wide under the applicable local government legislation.

If your council or council-owned corporation is seeking guidance on establishing or refining a compliance and governance framework, our team can assist with practical tools, documentation, and strategies to ensure your operations remain compliant, transparent, and effective.