The purpose of the Professional Practice Statements (PPSs) is to ensure Affiliates of the Affiliation for Business Resilience & Turnaround (ABRT), and all those who work for, represent or act on their behalf, maintain high professional standards at all times.
The PPSs set out guidance and suggested standards of practice for those engaged in the restructuring and turnaround of a business, and in the resolution of financial distress affecting a business or its stakeholders. They are intended to promote best-practice conduct that is aligned with prevailing statute, ethical frameworks and other relevant professional guidelines.
The PPSs describe required practice as a professional benchmark but are not statutory or legislative statements. They are not intended to prescribe a single mandatory approach or to operate as rigid rules. Affiliates are expected to exercise professional judgment, having regard to the specific circumstances, complexity and risk profile of each matter.
1. Seeking Advice
1.1
An ABRT Affiliate (‘Affiliate’) acts in the role of advisor to the directors, partners or trustees of a business entity. The Affiliate’s role is to gather sufficient information, often within a constrained timeframe, to enable informed advice on appropriate courses of action in a turnaround, restructuring or financial distress context.
1.2
The Affiliate introduces independent commercial, financial and restructuring expertise to discussions with directors, partners or trustees, applying professional judgement to understand the nature of the entity’s distress, identify viable options and explain the implications of those options.
1.3
The ABRT Code of Ethics requires Affiliates to periodically assess their competence in line with the scope of work and terms of engagement. Where an Affiliate does not possess the technical knowledge, skill set or experience required at any point during an engagement, the Affiliate must recommend referral to, or involvement of, an appropriately qualified professional and document the reasoning.
1.4
Seeking external advice is an expected component of competent professional practice in complex or high-risk matters. This obligation is reflected across PPS.2 (Triage), PPS.6 (Market Value) and PPS.11 (Risk Management).
2. Circumstances Requiring External Advice
2.1
External advice should be considered where matters involve legal, regulatory, technical or sector-specific complexity beyond the Affiliate’s competence, or where identified risks cannot be adequately managed without specialist input.
2.2
Examples include, but are not limited to:
- complex tax, superannuation or cross-border matters
- insolvency, safe harbour, phoenixing or creditor-defeating disposition risk
- asset valuation, market testing or realisation processes
- workplace relations and employee entitlement exposure
- regulated industries including health, financial services, energy or telecommunications
- cyber security, data breach or technology risk
2.3
Where material risks, ethical threats or judgement uncertainty arise, the Affiliate should consider whether peer consultation or review by another ABRT Affiliate is appropriate to test assumptions, manage threats to objectivity and strengthen defensibility.
2A. Appropriately Qualified Entity and ASIC RG 217
2A.1
In the context of directors seeking protection under section 588GA of the Corporations Act 2001, reference is made to advice being obtained from an “appropriately qualified entity”.
2A.2
Australian Securities and Investments Commission Regulatory Guide 217 (RG 217) confirms that no single qualification, profession or licence is determinative. The focus is whether the adviser or advisers engaged have skills, experience and independence appropriate to the specific circumstances of the company and the risks being addressed.
2A.3
An Appropriately Qualified Entity may therefore include, depending on the circumstances:
- a practising lawyer with expertise in insolvency, restructuring, directors’ duties or regulatory enforcement
- a qualified accountant with experience in restructuring, cashflow modelling and viability assessment
- a registered insolvency practitioner
- an independent valuer with relevant asset or industry expertise
- a turnaround or restructuring specialist with sector-specific experience
In many engagements, the appropriately qualified entity will comprise a combination of professionals, each addressing different aspects of legal, financial, operational and regulatory risk.
2A.4
The appropriateness of the adviser or advisory group should be assessed by reference to:
- the size and complexity of the business
- the nature and severity of its financial distress
- the regulatory and enforcement environment
- the likelihood of insolvency or formal administration
- the existence of phoenixing, accessorial or criminal exposure
2A.5
An ABRT Affiliate may themselves form part of the appropriately qualified advisory cohort provided the Affiliate:
- has relevant restructuring and turnaround expertise
- is independent of the company and its controllers
- is provided with sufficient information to give informed advice
- properly documents advice and assumptions
2A.6
Where legal professional privilege is required, or where legal exposure is material, the involvement of a practising lawyer will often be necessary in addition to the Affiliate’s commercial and restructuring role.
2A.7
Where reliance on a single adviser would be insufficient or imprudent, the Affiliate should recommend a multi-disciplinary advisory approach and document the reasoning on the Client Case Record.
2A.8
Consistent with RG 217, the focus is not on titles or designation, but on whether the advice obtained is informed, independent, appropriately skilled and directed to achieving a better outcome than immediate formal insolvency.
2A.9
Where directors elect not to obtain advice from an appropriately qualified entity, or limit the scope of advice obtained, that decision and its implications should be documented in accordance with PPS.3.
3. Legal Advice and Professional Privilege
3.1
Advice provided by an Affiliate is not protected by legal professional privilege. Affiliates must not hold themselves out as providing legal advice or imply that their advice attracts privilege.
3.2
Circumstances where legal advice should be considered include:
- insolvent trading exposure
- director penalty notices or regulatory enforcement
- phoenixing or creditor-defeating disposition risk
- accessorial or “involved in” liability
- disputes likely to proceed to litigation
3.3
Where legal professional privilege is sought, directors should be advised accordingly and any decision to decline legal advice should be recorded on the Client Case Record.
4. Privacy, Confidentiality and Sensitive Information
4.1
Affiliates must manage client information in accordance with confidentiality obligations and applicable privacy legislation, including the Privacy Act 1988 where applicable.
4.2
Turnaround engagements may involve sensitive personal information, including health-related information concerning directors or key personnel. Such information must be handled with heightened care.
4.3
Where engagements involve medical practitioners or healthcare businesses, Affiliates must be alert to additional confidentiality obligations arising from professional standards, patient confidentiality frameworks and contractual arrangements.
4.4
Affiliates must not seek, receive or retain patient-identifiable clinical information unless lawfully required and strictly necessary.
5. Government Agencies, Regulators and Public Bodies
5.1
Affiliates may advise clients on engagement with relevant government agencies and regulators, including:
- Australian Securities and Investments Commission (ASIC)
- Australian Taxation Office (ATO)
- Australian Financial Security Authority (AFSA)
- Australian Competition and Consumer Commission (ACCC)
- Australian Communications and Media Authority (ACMA)
- Australian Cyber Security Centre (ACSC)
- Australian Small Business and Family Enterprise Ombudsman (ASBFEO)
- Australian Financial Complaints Authority (AFCA)
- Personal Property Securities Register (PPSR)
5.2
AFCA membership is mandatory for Australian Credit Licence holders providing debt management services. Affiliates should ensure clients understand applicable regulatory frameworks.
6. Ombudsmen and Dispute Resolution Bodies
6.1
Affiliates may provide information regarding external dispute resolution bodies relevant to utilities, telecommunications and consumer matters.
6.2
Referral to such bodies does not displace the need for directors to address underlying solvency, governance or structural issues.
7. Mental Health Support and Capacity Considerations
7.1
Financial distress is frequently accompanied by sustained personal pressure on business owners and directors, which may affect engagement behaviour and decision-making capacity without constituting legal incapacity.
7.2
Affiliates are not mental health practitioners and must not provide counselling, diagnosis or treatment. However, identifying support pathways may be appropriate as part of prudent engagement and risk management.
7.3
Beyond Blue administers the NewAccess for Small Business Owners (NASBO) program, which provides structured mental health support for small business owners and sole traders.
7.4
Where appropriate, Affiliates may inform directors or business owners of NASBO as a voluntary support option, particularly where stress, isolation or cognitive overload is affecting engagement progress.
7.5
Any reference to mental health support must be non-directive, non-clinical and recorded only at a high level. No medical opinions should be documented.
8. Peer Review and ABRT Consultation
8.1
Where ethical threats, conflicts or complex risk issues arise, Affiliates may seek peer consultation from another ABRT Affiliate.
8.2
Peer consultation supports objectivity, professional judgement and defensibility and should be documented at a high level without breaching client confidentiality.
9. Record-Keeping and Disclosure
9.1
All recommendations to seek external advice, peer review or regulatory engagement must be documented on the Client Case Record in accordance with PPS.3.
9.2
Where advice is declined, that decision and its implications should also be recorded.
10. Interaction With Other PPSs
10.1
This PPS operates alongside:
- PPS.2 – Triage
- PPS.3 – Client Case Record
- PPS.5 – Director Safe Harbours
- PPS.6 – Market Value
- PPS.7 – Informal Creditor Workouts
- PPS.11 – Risk Management
10.2
Seeking external advice is a core mechanism by which Affiliates manage competence, ethical threats and engagement risk while supporting informed director decision-making.
