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MINCO agrees on principles for reform of directors' liability provisions.
MINCO AGREES ON PRINCIPLES FOR REFORM OF DIRECTORS' LIABILITY
The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen MP, today welcomed the agreement reached at the Ministerial Council for Corporations (MINCO) meeting in Sydney on the next step in reform of directors' liability provisions.
MINCO agreed on a set of principles by which all jurisdictions will audit their legislative provisions that deal with personal liability on company directors [see attachment].
This is the next step towards achieving consistency across Australia on the laws that impose personal liability on directors.
pleasing that MINCO has reached a sensible agreement on the next step of reform on directors' liability," Minister Bowen said.
"This result demonstrates good progress on this issue since the last MINCO meeting in August.
"There is no question that reform in this area is overdue, so it is particularly pleasing that all jurisdictions have agreed to take the next step.
ent will see the Commonwealth, States and Territories begin to audit their legislative provisions on directors' liability against these agreed principles."
Upon completion of the audit, the next step for all jurisdictions will be to move to amend any laws that do not adhere to the agreed principles.
The Council of Australian Governments (COAG) referred to MINCO, for its advice, a reform proposal to implement a consistent and principled approach to imposing personal liability on c
ompany directors for corporate misconduct across Australian law.
Principles Recommended by MINCO
A. Ministers recommend the following principles for adoption on a national basis in relation to corporate liability and the circumstances in which directors may also be liable for corporate fault: 1. Where a corporation contravenes a statutory requirement, the corporation
should be held liable in the first instance. 2. Directors should not be liable for corporate fault as a matter of course or by blanket imposition of liability across an entire Act.
Media Release of 6/11/2009
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