Articulating care, skill and diligence standards for non-executive directors

Voogt, Thea (2017) Articulating care, skill and diligence standards for non-executive directors. Company and Securities Law Journal, 35 2: 128-148.

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Author Voogt, Thea
Title Articulating care, skill and diligence standards for non-executive directors
Journal name Company and Securities Law Journal   Check publisher's open access policy
ISSN 0729-2775
Publication date 2017-03-14
Year available 2017
Sub-type Article (original research)
Open Access Status Not yet assessed
Volume 35
Issue 2
Start page 128
End page 148
Place of publication Rozelle, NSW, Australia
Publisher Lawbook Co.
Collection year 2018
Language eng
Formatted abstract
Non-executive directors ("NEDs") dominate listed company boards in Australia, reflective of their crucial role. This article is concerned with the tension in the articulation of their statutory duty of care and diligence in s 180(1) of the Corporations Act 2001 (Cth) and in case law, as compared to the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations. While the functions of directors, their diligence and skills requirements are similar in both articulations, there are significant differences in the requisite standard of conduct. Whereas the objective duty of care and diligence placed on all directors requires them to have a fundamental understanding of the business and to remain reasonably informed, the ASX Code is premised on oversight and there is the reality that NEDs are not involved in the day-to-day activities of the corporation. Therefore, NEDs who rely on the ASX Code as a benchmark for their standard of conduct are at increased personal risk.
Keyword Non-executive directors
Care, skill and diligence
Director's duties
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: HERDC Pre-Audit
TC Beirne School of Law Publications
 
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Created: Tue, 14 Mar 2017, 19:08:27 EST by Thea Voogt on behalf of T.C. Beirne School of Law