Private relationships, public consequences: Why disclosure matters

Recent Australian Securities and Investments Commission (ASIC) legal action reminds boards they face governance issues when conflicts of interest – even potential or perceived – arise from personal relationships that aren’t properly disclosed. 

Human relationships can be tricky, but Section 180 of the Corporations Act is not. It clearly states directors must discharge their duties with “the care and diligence that a reasonable person would exercise in the circumstances”. 

Disclosing conflicts of interest is paramount, as ASIC chair Sarah Court said when the commission commenced civil proceedings against former Super Retail Group CEO and Managing Director Anthony Heraghty in September 2026. “ASIC alleges Mr Heraghty put himself in a position where his personal interests conflicted with his duties to Super Retail Group and that he failed to properly disclose and manage that conflict,” said Court. 

The ASIC chair stressed that “this case is not about private relationships”, rather about governance, transparency and trust in the information provided to boards and the market.

It’s a timely reminder for boards to ensure governance around disclosing conflicts of interest is watertight. 

D for disclosure

“I’ve been getting queries from clients panicking about personal relationships – it’s not illegal,” says Jessica Tilbury, a partner with Holding Redlich in Melbourne. “ASIC’s concern is if there is a personal relationship that impacts your independence and affects how you undertake your duties to the company – then it’s an issue. We already have laws in place to prevent this, so it comes back to good corporate governance.”

ASIC’s recent legal action also underscores to directors that “they can only make decisions on what they know and they need full information”, says Tilbury.

The Super Retail Group proceedings allege that Heraghty provided misleading information to the board and the market. “[Super Retail Group] is a listed company, which means it has continuous disclosure obligations,” says Helen Bird, a senior lecturer in law at Swinburne University School of Business, Law and Entrepreneurship. 

“Information wasn’t disclosed to the board or they weren’t fully informed on certain decisions,” she says. “The result was that incorrect information – or at least the clarity of information – was given to the market. That affected its reputation and the price of the stock. 

“Reading between the lines, the company can’t be found to have committed a breach of continuous disclosure obligations because they didn’t know or weren’t properly told about the issues. It demonstrates why candid disclosure is so important.”

From disclosure to action

Bird and Tilbury both point out Section 180 is not about “banning” personal relationships, and add that it’s not only a failure to disclose romantic liaisons that can lead to legal and financial consequences. “It’s important to say whether you have a very close relationship, platonic or sexual, which could potentially affect your decision making,” says Bird.

“You need a culture where people feel comfortable with disclosure, and a written policy around disclosing personal relationship conflicts, which stands up to scrutiny,” says Tilbury, who specialises in dispute resolution, white-collar crime and regulatory investigations. “Disclosure is the first step. It doesn’t just stop with, ‘OK, I’m in a conflict, I’ve told people, I’m fine’,” she says. “It’s not just ticking a disclosure box. It’s what happens next.”

Tilbury recommends a four-pronged approach for conflict policies: Identify, disclose, isolate and handle complaints. However, a written policy is only as good as the culture of disclosure it fosters and should be proactively revisited by the board. 

“That’s not only in the best interests of the company, it’s for the board’s own protection,” she says. “Directors are given so much information, but they only know what they know. It can’t hurt to put a clause in the policy that it shall be reviewed at whatever period is reasonable for the size and turnover of that particular company.”

Bird, a former solicitor who specialises in corporate governance and law, says these policies should be part of companies’ risk management frameworks. “No policy is perfect and this [the Super Retail Group] case illustrates how nuanced it can be,” says Bird. “What you need is a sound head, someone at the top of the company who acts in a mature fashion, can understand the situation and be pragmatic about it – and defend the right of the company to act on it.”

Guidelines for those actions should be included in the policy, knowing that the circumstances may require unique steps to be taken to avoid the conflict of interest. Once a conflict is disclosed, the board must take immediate action to put safeguards in place. 

“It could be a whole heap of things – changing reporting lines, recusing yourself from particular meetings or having someone independent appointed to manage matters such as remuneration, bonuses and promotions for the specific employee,” says Tilbury.

Safe passage for whistleblowers

The Super Retail Group case also involved whistleblowers who were allegedly, at best, not taken seriously. When internal management is compromised because a powerful executive is involved in a complaint, whistleblowers must go outside standard channels to report.

“Often, we see the whistleblower goes to the media because they’re not getting any response inside the company,” says Bird. “If the management of a company is compromised by a CEO being involved in the complaint, it’s a little delicate and the appropriate person for the whistleblower to go to in that situation is the board chair.”

When issues arise further down the corporate ladder, boards may not need to be immediately involved, but human resources must be informed to ensure appropriate oversight and risk management. 

“The impact of failing to disclose a relationship definitely increases the more senior an employee is within the company,” says Tilbury. “Your policy might have a threshold of risk factors as a governance and due diligence process. If in ticking them off the answers are that this could end up in the federal court or in the media, and trigger legal fees or reputational damage, you’ll want to have a policy in place that it gets escalated.”

While ASIC is pursuing an individual over the Super Retail Group matter, directors are on notice. “ASIC has made it very clear that directors failing to give proper disclosure is an ongoing enforcement priority,” says Tilbury. “Sarah Court has repeatedly said that corporate governance, directors’ duties and anything that damages market integrity are all priorities for ASIC.”

The ASIC action “reminds executives of the importance of accurate information”, says Bird. 

“Usually, it falls on the company to deal with this, but in this case, they’re pursuing an individual. It’s a very strong message of what must be disclosed, and that you have legal obligations to face if you don’t – and the impact is most serious in a public company.”