Directors' duties to stakeholders : a reform proposal based on three false assumptions

The Corporations and Markets Advisory Committee has been asked to consider whether the duties of directors under the Corporations Act 2001 (Cth) should be broadened to require directors to take into account the interests of stakeholder groups other than shareholders when making corporate decisions. In this article, the author argues that the existing statutory duties of directors in Australia should remain unchanged. The existing duties of directors, in particular the overriding duty of directors to act in the best interests of the company, already accommodates consideration of stakeholder interests by directors if the decision is justifiable as being in the company's best interests. Furthermore, corporate culture and norms are moving towards embracing stakeholder engagement, again with the implicit recognition that integrating stakeholder considerations within the decision-making processes of companies is integral to achieving long-term sustainable growth.

The stakeholder debate and directors' fiduciary duties

It is usually said that a company is a legal entity separate from its management and shareholders and that the business and affairs of a company must be managed by or under the direction of its board. This implies various duties and responsibilities for directors.<br>Directors' duties traditionally include onerous fiduciary duties and obligations of care, skill and diligence in terms of the common law, various statutory provisions in the Companies Act 61 of 1973 requiring certain things of directors or preventing them from doing certain things (see, eg, ss 221-227 and 234-246 of the Act), and possible duties imposed by the articles of association or even separate agreements between directors and their companies.

Directors' duties to creditors in Australia after spies v the Queen

In August 2000, the High Court handed down its decision in Spies v The Queen . According to most commentators, the decision ended a "quiet revolution" which had been underway since Walker v Wimborne by rejecting the suggestion that directors owe an independent duty to creditors. In this article, the writer responds to this commentary in two ways. First, by contending that the High Court's comments in Spies concerning directors' duties to creditors were merely obiter, thereby leaving open the possibility that an independent duty to creditors will be confirmed in a subsequent case. Secondly, by suggesting that if the commentary to date is correct, then the Spies decision has minimal impact in terms of creditor protection as directors' duties under the Corporations Act 2001 already provide sufficient protection for creditors.

Australian tort law reform: statutory principles of causation and the common law

By mid-2004, Parliaments in each Australian jurisdiction will either complete or will be in the process of partial codification of the law of torts. The reforms, including those to the law of negligence, are extensive. This article focuses on codification of the law of causation as an element of the cause of action in negligence. It examines the background to "tort reform", as the process has been labelled, and discusses the common law paradigm of negligence and various approaches to causation. It then analyses and compares the causation provisions in each jurisdiction.

Privatising human rights: what happens to the state`s human rights duties when services are privatised?

Human rights law has traditionally focused on the obligations of states in fulfilment of human rights - how a state-focused approach fits in a world where social services are frequently privatised or contracted out - examples of social service provision, health, education and prisons, and inquiries into the obligations of the state and the private operators in relation to these services - private providers of social services have certain human rights obligations within their respective spheres of activity - the state retains an obligation to guarantee the protection and realisation of human rights of everyone under its jurisdiction, regardless of the character of the service provider.

The limitations of using statutory child protection data for research into child maltreatment

Child protection legislation has undergone a number of changes since its inception, changes that have redefined the population of children in need of protection. However, child protection data on notifications and substantiations remain the most common source of data for statistics on the rate of maltreatment and the breakdown of specific maltreatment types. In the present study, three factors are identified that have compromised the accuracy of child protection data reporting the incidence of child abuse and neglect: (i) the legislative changes that mandate child protection services to protect children from harm rather than from identifiable adult actions; (ii) the shift from the Harm Standard to the Endangerment Standard; and (iii) the assignment of responsibility solely to parents.

Ambiguities and inconsistencies in relation to the obligations of proxies under corporations law: a model for reform

This article reconsiders the important question which came to light as a result of the controversial 2002 Coles Myer annual general meeting: do directors that are appointed as proxy have an obligation to vote as directed (and indeed should they)? A recent decision of the New South Wales Supreme Court, which was subsequently approved on appeal, stands for the proposition that proxy holders are agents of the shareholders that appointed them. However, currently the Corporations Act only requires a Chairman appointed as proxy to vote as directed — not an ordinary director. This article briefly explains the present state of the law in Australia on this issue, and then explores some interesting recent judicial remarks which may suggest that ordinary directors appointed as proxy must vote as directed in order to satisfy their director’s duties (both common law and statutory) to the company. We finally outline a proposed statutory reform initiative which seeks to remove the present uncertainty in the law by introducing a blanket requirement that all proxy holders must vote as directed.

Some care, little responsibility? Promoting directors'and managers' legal accountability for Occupational Health and Safety in the workplace

Health and safety at work remains a serious and under-recognised problem in Australia. This paper argues for the importance of increasing the individual responsibility and accountability of senior managers and directors of corporations for the development and maintenance of occupational health and safety (OHS) standards in the workplace. In order to do so, the paper first sets out the range of statutory and general law duties and liabilities to which directors and senior managers are subject, considers to what extent these obligations have relevance in the OHS area and argues for the extension of these duties and liabilities in some circumstances. The paper then goes on to argue for a better legislative model for the legal responsibility of managers and officers, supported by the increased prosecution of individuals in appropriate circumstances, as well as acknowledging the benefits of a broader range of non-legal strategies to improve board level commitment to OHS that will influence corporate compliance overall.

Statutory injunction - call for amendment to s 1324 of the Corporations Act

It is well documented that s 1324 is a useful tool for restraining a person from engaging in conduct that contravenes the Corporations Act 2001 (Cth). Without examining the provision, one tends to agree with that statement. In practice, however, the provision does not often provide the outcome that is expected. The author argues that the lack of use of s 1324 is due to the uncertainty and ambiguity in the application of the provision. Unlike with ASIC, the test that a person must satisfy when applying for an injunction is not clear cut. Whether damages could be claimed under s 1324 in place of an injunction is also unclear. The article sets out to argue that some integration with the equitable principles is vital for the survival of s 1324, as injunctions are traditionally a remedy conferred in equity and the Parliament has adopted the concept.

Prevention of suicide : police powers, parliamentary intent and judicial interpretation

While in most countries suicide is no longer a crime, it is also acknowledged that the state has an interest in the preservation of human life, prevention of suicide, and protection of vulnerable persons from harming themselves. In a civil, secular and democratic society, however, the public law principle of state protective powers has to be balanced against the private law principle of personal autonomy (personal self-determination). Under the doctrine of autonomy, competent adults of sound mind can make legally binding voluntary choices, including the so-called ‘death-choice’ (refusal of life-sustaining or life-prolonging treatment as well as suicide). To add to the complexity, whereas the powers of the state in relation to suicide and its prevention have been codified, the concepts of personal autonomy and personal liberty are grounded in common law. Stuart v Kirkland–Veenstra [2008] VSCA 32, which is at present being considered by the High Court of Australia, exemplifies tensions that arise in the suicide-prevention area of jurisprudence. This article explores powers and duties of police officers in relation to suicide prevention and the notion of mental illness by reference to the Kirkland–Veenstra case, the relevant statutory framework and the common law.

Legislation and statutory interpretation

A clear and accessible guide to one of the most important skills all students of law must master: the skill of understanding legislation. The authors provide an engaging overview of important aspects of the legislative process, its application and interpretation, together with examples questions and excerpts of relevant legislation. This book is specifically designed for students studying the statutory process and statutory interpretation or anyone interested in knowing more about this subject.

The democratic credentials of statutory bills of rights (and those of a self-styled majoritarian democrat)

This article has two aims. First, it seeks to demonstrate that the democratic credentials of statutory rights instruments are stronger than bills of rights sceptics such as Professors James Allan and Jeremy Waldron realise. It does so by examining the process by which statutory bills of rights are enacted and then provides an account as to why they are adopted that differs from the one offered by Allan and Waldron. This is done to suggest that the reason why a statutory rights instrument is adopted and the process itself has considerable democratic significance. And second, it seeks to assess the democratic credentials of Professor Allan's own critique of statutory bills of rights. The analysis undertaken in this regard reveals that in important respects Allan is anything but the majoritarian democrat that he routinely claims to be.

Regulatory and enabling approaches to corporate law enforcement : patterns of litigation 1986-2002 and the effect of recent reforms in New Zealand, Australia and the United Kingdom

Enforcement of corporate rights and duties may follow either a ‘regulatory’ or ‘enabling’ model. If a regulatory approach is taken, enforcement action will generally be undertaken by regulatory agencies such as, in New Zealand, the Registrar of Companies and Securities Commission, the Australian Securities and Investments Commission (ASIC) or the Department of Trade and Industry (DTI) in the United Kingdom. If an enabling approach is chosen, enforcement action will more often be by private parties such as company shareholders, directors or creditors. When New Zealand's company law was reformed in 1993, a primarily private enforcement regime was adopted, consisting of a list of statutory directors' duties and an enhanced collection of shareholder remedies, based in part upon North American models and including a statutory derivative action. Public enforcement was largely confined to administrative matters and the enforcement of the disclosure requirements of New Zealand's securities law. While the previous enforcement regime was similarly reliant on private action, the law on directors' duties was less accessible, and shareholder action was hindered by the majority rule principle and the rule in Foss v Harbottle. This approach is in contrast with that used in Australia and the United Kingdom, where public agencies have a much more prominent enforcement role despite recent and proposed reforms to directors' duties and shareholder remedies. These reforms are designed to improve the ability of private parties to enforce corporate rights and duties. A survey of enforcement litigation in New Zealand since 1986 indicates that the object of a primarily enabling enforcement regime seems to have been achieved, and may well have been achieved even without the 1993 reform package. Private enforcement has, in fact, been much more prevalent than public enforcement since well before the enactment of the new legislation. Most enforcement action both before and after the reform was commenced by shareholders and shareholder/directors, and most involved closely held companies. Public enforcement was largely undertaken in areas such as securities law, where the wider public interest was affected. Similar surveys of Australian and United Kingdom enforcement litigation reveal a proportionally much greater reliance on public bodies to enforce corporate rights and duties, indicating a more regulatory approach. The ASIC and DTI enforced a wider range of provisions, affecting both closely and widely held companies, than those subject to public enforcement in New Zealand. Publicly enforced provisions in Australia and the United Kingdom include directors' duties and provisions dealing with disqualification from managing companies, as well as securities law requirements.