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Commonwealth to conduct audit of laws impacting on directors' liability.



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SENATOR THE HON NICK SHERRY Minister for Superannuation and Corporate Law

NO.034

COMMONWEALTH TO CONDUCT AUDIT OF LAWS IMPACTING ON

DIRECTORS' LIABILITY

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has today confirmed that the Commonwealth will conduct an audit of its laws that impact on the issue of company director liability and will do so against the principles developed by the Council of Australian Governments (COAG).

COAG referred a set of principles to the Ministerial Council for Corporations and tasked the Commonwealth, State and Territory members of the Ministerial Council to assess the principles and conduct such an audit.

"Today I can confirm that the Commonwealth will move forward with COAG's request to progress increased harmonisation of the laws on company director liability."

"COAG requested the Ministerial Council to examine the imposition of personal criminal liability for corporate fault and the contribution this makes to the goal of a seamless national economy, including nationally consistent regulation."

"In the first instance, the Commonwealth will do this by conducting a comprehensive audit of our own laws against the COAG principles," said Minister Sherry.

The COAG principles state:

z where companies contravene statutory requirements, liability should be imposed in

the first instance on the company itself;

z personal criminal liability of a corporate officer for the misconduct of the corporation

should generally be limited to situations where the officer encourages or assists the commission of the offence (accessorial liability); and

z in exceptional circumstances, where there is a public policy need to go beyond the

ordinary principles of accessorial liability, a form of deemed liability could be imposed on a corporate officer only using a 'designated officer' approach (for minor offences) or a 'modified accessorial' approach (for more serious offences).

The Commonwealth aims to conduct the audit in the second half of 2009.

Media Release of 17/04/2009

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17 April, 2009 CANBERRA

Media Contact: Anna Fenech - 0417 454 811

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