By Pamela Hanrahan -
Snapshot
- Directors’ duties are a foundational feature of Australian corporate law and have significantly expanded beyond traditional fiduciary obligations.
- ASIC’s enforcement action has led to several recent cases interpreting the extent of directors’ duties and discussing the benchmark for personal liability for failing to prevent corporate misconduct.
- This article provides a comprehensive overview of the current legal framework, enforcement trends and evolving responsibilities surrounding company directors’ duties in Australia, with insights drawn from recent high-profile cases and statutory developments.
Few areas of corporate law attract as much attention as directors’ duties. Interest often spikes during high-profile enforcement actions involving public company directors, like the Australian Securities and Investment Commission’s (‘ASIC’) case against the former board of The Star Entertainment Group Ltd (‘Star’). With hearings completed and Lee J’s important decision in the Star case expected next year, it is timely to take stock of the current state of directors’ duties and their enforcement in Australia.
Company directors are the largest group of people subject to occupational regulation in Australia. In June 2024, 2.6 million individuals held Director Identification Numbers connected to their membership of the boards of companies, registered Australian bodies, registered foreign companies or Aboriginal and Torres Strait Islander corporations. The Australian Taxation Office (‘ATO’) estimates this represents about 89 per cent of Australian directors, putting the total number of directors close to 3 million this year. As a result, most solicitors come across directors’ duties issues in all areas of practice.
