Directors are largely responsible for the good governance of corporations, which at its core, requires financial literacy. Emerging research shows that directors consistently fall short on measures assessing their financial literacy. This is unsurprising given the lack of restrictions on who can be a director in Australia, leaving many at risk of serious penalties. While it would be impractical to mandate training for every director, this article describes a framework to identify sectors in which breaches of finance-related duties are most common, and might be prevented by mandatory financial literacy training. After conducting searches through case law and other enforcement records, this article identifies that the most vulnerable sectors are construction, real estate, and financial services. Analysis revealed that director financial literacy training may be most effective to prevent breaches in the construction and real estate sectors.
Tools that embody well-trained artificial intelligence (AI) models offer resource-strapped superannuation fund trustees the prospect of fast, efficient and rigorous support for their decision-making. But there are operational and legal risks. Not all the decisions a superannuation fund trustee is called upon to make are therefore suited to the application of AI. So what might super fund trustees properly use AIto do? This article considers the legal and practical issues facing the trustees of superannuation funds who may be contemplating employing AI tools in the various aspects of administering their funds. It finds that above and beyond the well-documented potential for AI models (and therefore the tools that use them) to generate nonsensical outputs, the requirement, fundamental to the office of trustee, to be able to demonstrate careful personal engagement in the exercise of key discretions poses challenges that are particularly acute.
The Corporations Act 2001 (Cth) does not currently contribute to legislative efforts to hold companies accountable for human rights harms or to provide remedies for affected individuals. While the United Nations Guiding Principles on Business and Human Rights anticipate a central role for corporate law, international obligations have been implemented outside corporations law. Some jurisdictions-such as France, Germany, and the European Union-have introduced mandatory human rights due diligence (mHREDD) regimes. France embeds these in its corporate code; Germany's regime operates alongside it. However, these reforms remain politically contested, with both the German Act and the EU Corporate Sustainability Due Diligence Directive facing delays. This article considers whether, and in what form, a due diligence obligation could be introduced into Australian corporations law. Drawing on international developments, it proposes a model requiring risk analysis, compliance systems, grievance mechanisms, and remedy access, and considers ASIC's potential role in supervision and enforcement.
The climate-related financial risk disclosure regime was introduced in 2024 and has been in force since 1 January 2025. The law requires certain companies to disclose forward-looking statements, including climate-related risks and opportunities, in the new sustainability report. With the regime relying on the existing liability frameworks within the Corporations Act 2001 (Cth), whether the statutory director's duty of care liability in s 180(1) affords an effective mechanism for forward-looking statements arising from the new reporting regime is examined. The article evaluates the statutory duty of care for future statements and the potential application of the statutory business judgment rule to forward-looking disclosures both within and outside the sustainability report. By examining the narrow application of the duty of care in relation to forward-looking statements, the article argues that directors' concern for potential breach of duty of care is unlikely to be heightened with the reporting regime.
The public mergers and acquisitions (M&A) regime in Australia is established on the Eggleston Principles, which set the objectives of the public equities market and the parameters for its transactions. Traditionally, these change of control transactions have either taken the form of a takeover bid or a scheme of arrangement, however recently the market has seen the emergence of a new concurrent scheme and takeover procedure (CST). In 2022, Black J commented that CSTs may present some risks to the regime and their compliance with the regime's principles requires further consideration. This article examines the development of CSTs and their concordance with the Eggleston Principles. It argues that some aspects of CSTs have disrupted Australia's M&A market by placing pressure on the Eggleston Principles and further consideration by regulators is needed to address possible institutional gaps.
There are inefficiencies and moral objections to controlling shareholders being able to avoid bearing liability for a company's torts while being able to profit from the company's tortious activities. This article argues for a statutory model of liability for controlling shareholders in respect of corporate torts which lead to personal injury or death and puts forward a concrete model for reform, to impose liability on shareholders with control of a company and who can be regarded as being at fault in respect of the company's torts. Existing concepts of control and due diligence in the law are analysed and adapted to provide the basis of the proposed model provisions on liability. The model provides a workable solution that promotes accountability of corporate controllers, while at the same time ensuring that ordinary investors and minority shareholders who do not wield real control over a company are still protected by limited liability.
Shareholder agreements have nowadays become highly popular, particularly in proprietary companies and in joint venture arrangements. They usually seek to formalise relations and understandings between shareholders on such key issues as involvement in management, the power balance including rights of founders and minorities, veto rights, buyout and succession rights, pre-emption rights on new share issues and dispute resolution. In this article, the author will focus on their effects on the oppression remedy where a shareholders' agreement may provide a factual matrix of "what was in contemplation of the parties" when incorporating the entity, a notion that has also found expression in the debated concept of "legitimate expectations" about the operations of the company including particularly, the expectation of participation in its management.
The Australian Parliament is on the cusp of legislating the introduction of a new climate-related financial disclosure regime for large Australian corporates. The regime is intended to provide investors with greater transparency and comparable information about a reporting entity's exposure to climate-related financial risks and opportunities, as well as their climate-related plans and strategies. The proposed legislation has been described by the Chair of the Australian Securities and Investments Commission as an "ambitious new once-in-a-generation change". This generational change has the capacity to be particularly profound for Australian natural resources entities - who are synonymous with conducting emission-intensive businesses. Accordingly, this article evaluates the fundamental aspects of the proposed legislation and examines its potential implications for Australian natural resources entities.
A question which arises in corporate insolvency law is whether a statutory demand can be validly issued for cryptocurrency alleged by a creditor to be owing by a debtor corporation. That question necessarily requires an analysis of the nature of cryptocurrency, the statutory demand regime within Pt 5.4 of the Corporations Act 2001 (Cth) and whether cryptocurrency can properly constitute a "debt" or "money" for the purposes of that regime
Over recent years, there has been a noticeable rise in the number of takeover contests in the Australian market. In 2023 alone, half of all announced public M&A deals involved unsolicited approaches and almost a quarter involved two or more competing bidders. The Australian Takeovers Panel has largely given target boards significant latitude to respond to takeover contests for the benefit of their shareholders. This article seeks to highlight the apparent reluctance of target boards to engage with unsolicited proposals in contests for control and argues that the current response of the Takeovers Panel has facilitated this reluctance to engage. By drawing on recent takeover contests, the article examines how target boards may have used hard exclusivity and selectively granted due diligence to prematurely lock -out bidders in a developing contest for control. The article considers the approaches in the United Kingdom and the United States as possible ways to address these concerns.
Part 5.7B of the Corporations Act 2001 (Cth) contains statutory mechanisms available to company liquidators to facilitate the recovery of property or compensation for the benefit of creditors. Amongst the liquidator's legislative arsenal in this Part is s 588FA which facilitates the recovery of payments which were made preferentially to particular creditors during the six-month period leading up to the winding up. The purpose of this provision is to permit recovery of payments from the preferred creditor in order that all creditors may share rateably in a distribution of the company's assets. Although the section was introduced many years ago, there is still considerable uncertainty at a foundational level as to how the section in fact operates. That uncertainty is explored in this article, the reasons for it are explained and solutions are suggested with a view to clarifying this important area of insolvency law.
Just over a decade since the first social impact bond (SIB) was launched in Australia, SIBs remain a niche development within the broader environmental, social and governance makeover of capital markets. In 2023, Treasurer Jim Chalmers signalled an intention to explore impact investing as a means of pursuing improved social conditions in Australia in the face of fiscal strains.(1) This article examines the unique characteristics of SIBs as a sociofinancial product against their current regulatory backdrop. It considers the appropriateness of the current wholesale/retail bifurcation when it comes to SIB offerings in Australia, and the nature of retail participation and regulation as a public good. The article posits that it is the measured induction of SIBs into the existing retail investment framework that will augment the democratic integrity of their governance and accelerate their normalisation as a mainstream asset class.
There were originally eight civil penalty provisions enforced by the Australian Securities Commission. Now there are 436 civil penalty provisions enforced by the Australian Securities and Investments Commission (ASIC). Given this very substantial increase, the authors analyse the reasons for the introduction and expansion of ASIC's civil penalty regimes. In addition, the authors consider several issues relating to the merits of civil penalties. The authors argue that (1) the significant increase in the number of civil penalty provisions, as well as the expansion of accessorial liability under all of ASIC's civil penalty regimes, means that debates about the merits of civil penalty proceedings assume more importance; and (2) the recent significant increase in the maximum civil pecuniary penalties that apply to the civil penalty regimes administered by ASIC means that courts are likely to increasingly focus on whether penalties are oppressive.
Schemes of arrangement have steadily grown in importance in public company mergers & acquisitions over the last 25 years. They have replaced takeover bids as the dominant form of transaction for larger deals. However, the nature of a scheme of arrangement and its related arrangements often give rise to potential risks for shareholders and the market, which are usually overlooked until something goes wrong. This article comments on the lack of any requirement for the courts to consider the "efficient, competitive and informed market" principle from Ch 6 of the Corporations Act 2001 (Cth) and suggests the Takeovers Panel could play a larger role in addressing these issues.
This article evaluates the extent to which IOSCO's initiatives may be effective in addressing the systemic risk associated with hedge fund industry. It does so by paying close attention to the characteristics, limitations and possibilities of transnational regulatory networks (TRNs), of which IOSCO is an example. From the perspective of the constituent elements of TRNs, this article comments on the individual components of IOSCO by borrowing from the findings on TRNs' effectiveness in TRN theory. In doing so, it examines the values and deficiencies of the IOSCO framework in terms of its member regulators and governance structure, normative output, and enforcement, sanction and accountability mechanisms. It finds that IOSCO holds advantages in technical expertise and professionalism, efficiency and cost saving, public participation, and flexibility and adaptability, but its drawbacks in governance structure and standards, lack of dispute settlement body, and weakness in accountability mechanism compromise the effectiveness of the IOSCO framework.
