ASIC to research the balance between corporate liability and directors (individual) liability.

AICD has expressed concern on the balance between corporate liability (i.e. relying on the corporate veil) and directors (individual) liability. In response the ASIC Chair in a speech to AICD on 26 November said ASIC will research the issue:

"The concern is that able and experienced women and men are shying away from the listed environment because of higher liability risks. It is argued that even if claims are not successful, the potential of reputation damage is too much risk to accept board positions…

We recognise, however, that it may be time for a stocktake in this area of personal liability – to assess this balance between ensuring our boards take risks (so that our economy keeps growing) with protection of shareholders and creditors and consumers where individual liability may be appropriate.

Our Capital Markets taskforce will, for the Summer School in February 2008, commission a study on the current state of the law on this important issue. It will present its report at the Summer School. This will be our initial contribution on this important debate. How the debate will unfold from this will depend on the outcome of research and the debate which we hope will follow."

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