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Director liability headed towards harmonisation

Director liability headed towards harmonisation

A national system of regulations is a step closer with the Government announcing on Friday it would audit laws which relate to company director liability.The Council of Australian Governments…

A national system of regulations is a step closer with the Government announcing on Friday it would audit laws which relate to company director liability.

The Council of Australian Governments (COAG) has referred a set of principles to the Ministerial Council for Corporations, with Senator Nick Sherry confirming that the Commonwealth will move forward with the request.

"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," he said.

The COAG principles state that liability should be imposed on a company at first instance for contravention of statutory requirements and personal criminal liability should generally be limited to situations in which the officer encourages or assists the commission of an offence.

The Commonwealth aims to conduct the audit in the second half of the year.

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