AICD Review: CEO Report

Duties update for all members. Members will shortly receive their complimentary copy of the 17th edition of the AICD publication Duties and Responsibilities of Directors and Officers, authored by Professor Bob Baxt. 

This seminal text, which should appear on the bookshelf of every Australian director, is provided free of charge to all AICD members. It is a valuable guide to the major responsibilities and duties of directors and senior officers. It is relevant to listed companies, private companies, not-for-profit organisations and government business enterprises. Recent important changes to the Corporations Act are incorporated, including the introduction of a business judgment rule. The law provides improved, yet somewhat limited, protection to directors who act with care and diligence in undertaking their duties.

Other recent changes help clarify the circumstances in which directors and officers can rely upon information or advice provided by others. These and other changes make it more difficult to establish that directors are in breach of their duty provided they have followed procedures and have undertaken due diligence. The text notes that the law provides a clear signpost that different standards will be imposed on directors depending upon the nature of their experience, the corporations of which they are directors, and other circumstances.

The book provides information on recent cases which have contributed to the reshaping of the law on directors and officers duties and responsibilities. Its language is clear and practical, enabling readers to use it as a ready resource to deal with questions as they arise. Company law is constantly the subject of review by the courts and by Parliament. As important decisions are handed down by the courts, Professor Baxt notes the decisions in the Law Reporter pages of this journal. Changes to the Commonwealth Criminal Code, which came into effect in December 2001, make directors liable for their company's breaches of Commonwealth laws in certain circumstances. The presence of active risk management and compliance practices and programs can provide a defence to this new law and all directors and officers should now have in place programs to address the potential risks associated with this new law. The Company Director Manual, produced by the Centre for Professional Development for the AICD, is another valuable resource for directors and managers.

The manual is designed as a desk reference for company directors and provides a plain English guide to a wide range of compliance issues that affect the board's role. These include finance issues, taxation and superannuation, human resource and employment issues, trade practices, intellectual property and environmental issues in addition to Corporations Act material. The manual is available on subscription. All participants in the Company Directors Course receive a copy of the manual as part of their course materials. The AICD remains committed to providing members with information and resources that assist directors and managers reporting to boards to undertake their roles more effectively. The publications service of AICD supports this important objective.

Disclaimer

The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.