On 17 April 2009, Senator Nick Sherry, Minister for Superannuation and Corporate Law, 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.
The COAG principles state:
- where companies contravene statutory requirements, liability should be imposed in the first instance on the company itself;
- 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
- 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).
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.
The Commonwealth has advised that it aims to conduct the audit in the second half of 2009.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.