By Rama Gaind
PS News Books
Duties and Responsibilities of Directors and Officers
By Professor Robert Baxt (AICD, $50.00 for non-members, softcover, 328 pages)
The role of a company director is becoming increasingly intricate with the introduction of new laws, class actions on the rise and an increase in the activity of regulators.
Their actions are under scrutiny for a multiplying range of requirements including commercial and legal expectations and also at a time when reform is the subject of debate.
In the 20th edition of his book, Professor Baxt, a leading law academic, says that recent court cases such as Centro, James Hardie and Fortescue have made it even more difficult for directors to navigate their role without fear of being held personally liable.
“There seems to be a neverending raft of legislation imposing personal liability on directors,” he advises. “With approximately 700 State and Territory laws making directors liable, it is little wonder that organisations across the country are being hampered by less than optimal decision making.”
In addition to addressing these legal minefields, Professor Baxt also says governments need to seriously focus on real reform in this area.
“Continuing to draft strict liability provisions into legislation or provisions which reverse the onus of proof against directors is fundamentally obnoxious.”
“On top of this, the growth of class actions and results in cases where shareholders/members have been able to sue directors and companies is another cause for concern.”
“The rise in class actions has been assisted by recent court decisions and the lack of appropriate regulation for professional litigation funders. This results in increased costs to the public by way of higher consumer prices, a reduction in shareholder value and decreased tax revenue as profits decline.”
Professor Baxt, a former chairman of the Trade and Practices Commission (now ACCC), has followed developments in corporate, securities, competition and tax law “with passion” for more than 50 years and has authored Duties and Responsibilities since its fifth edition in 1987.
His judicious counsel is timely.
This book is only available online by visiting the books page at:
Edition 405, 15 April 2014
To find out more about Rama Gaind click here.