find the latest legal job
Corporate Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Highly-respected, innovative and entrepreneurial Not-for-Profit · Competency based Board
View details
Chief Counsel and Company Secretary
Category: Generalists - In House | Location: Newcastle, Maitland & Hunter NSW
· Dynamic, high growth organisation · ASX listed market leader
View details
In-house Projects Lawyer | Renewables / Solar | 2-5 Years PQE
Category: Generalists - In House | Location: All Australia
· Help design the future · NASDAQ Listed
View details
Insurance Lawyer (3-5 PAE)
Category: Insurance and Superannuation Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Dynamic organisation ·
View details
Legal Counsel
Category: Corporate and Commercial Law | Location: North Sydney NSW 2060
· 18 month fixed term contract · 3-5 years PQE with TMT exposure
View details
Director unease about personal liability on rise

Director unease about personal liability on rise

A Johnson Winter & Slattery (JWS) partner has backed the findings of a new survey that revealed a growing concern among Australian directors about regulation and personal liability.

Damian Reichel (pictured), a M&A specialist at JWS, told Lawyers Weekly the latest Australian Institute of Company Directors' Director Sentiment Index, released yesterday (14 November), highlighted an increasing pessimism about the impact of recent legal judgments, such as the Centro case, on director liability.

“The survey shows that directors' concerns about personal liability are increasing, from an already high base,” said Reichel. 

“There have not been any particular law changes, but directors are seeing from court decisions that if there is a corporate failure their conduct will be picked over ... even where the fault did not cause the failure.  Centro is a clear case in point,” he added. 

Significantly, 54 per cent of the directors surveyed said legal decisions impacted their willingness to accept new board appointments, while 41 per cent of directors maintained that legal decisions negatively impact business decision-making, up from 34 per cent in the April survey.

Reichel believes difficult economic conditions will continue to place stress on businesses, and added that it’s a worrying sign that many directors seem “more mindful about protecting themselves from liability than guiding their companies through their difficulties”.

“Many talented directors will not even take on the role in the first place,” he said. “It is not ultimately in investors' interests to have risk-adverse directors.”

Reichel added that it is incumbent on regulators, lawyers and ultimately law makers to consider if the right balance has been struck between “the assumption of investor risk - without which there can be no reward - and investor protection”.

The index, a twice-yearly survey of more than 500 Australian chairmen and directors of media and large companies, measures the opinions and future intentions of the director community.

Forty two per cent of directors surveyed said workplace laws and rules were a key impediment, closely followed by government policies (41%), excessive red tape (39%) and skills shortages (31%).

Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Director unease about personal liability on rise
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
LCA president Fiona McLeod SC
Aug 17 2017
Where social fault lines meet the justice gap in Aus
After just returning from a tour of the Northern Territory, LCA president Fiona McLeod SC speaks wit...
Marriage equality flag
Aug 17 2017
ALHR backs High Court challenge to marriage equality postal vote
Australian Lawyers for Human Rights (ALHR) has voiced its support for a constitutional challenge to ...
Give advice
Aug 17 2017
A-G issues advice on judiciary’s public presence
Commonwealth Attorney-General George Brandis QC has offered his advice on the public presence of jud...
APPOINTMENTS
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
opinion
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
Help
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...