The Australian Institute of Company Directors (AICD) has welcomed a report to the Federal Government which recommends harmonising different Commonwealth, state and territory laws on corporate liability in favour of a uniform, principles-based approach.
The Federal Government’s Corporations and Markets Advisory Committee (CAMAC) today recommended a single, national policy governing the circumstances under which directors or company officers can be held responsible when their company breaches the law.
AICD General Manager of Policy Rob Elliott said the recommendation would clear up the current costly and confusing system.
“There is no reason why a director in Tasmania should be treated differently to one in Queensland if their company breaches the law,” he said.
“It has become increasingly difficult for companies to comply with legislation when the provisions designed to bring about that compliance are so diverse.
Mr Elliott said the AICD also welcomed the CAMAC recommendation which confirms individuals should only be penalised where they have personally assisted or been aware of misconduct.
“The concept of derivative liability – where a director or company officer is held responsible for corporate fault without personal involvement – should only be sparingly used and in clearly defined circumstances.”
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