What are the top three things to consider in Australia with regard to director liabilities / reporting to the board?

01. In Australia, there are separate jurisdictions for each state and territory, as well as the commonwealth jurisdictions which govern the whole of Australia. It is important for individuals or companies to understand that law and regulations may be different depending on which state or territory they are residing or trading in.

02. Changes to safe harbour and ipso facto legislation aim to protect businesses from immediate liquidation by creating safe harbour from personal liability for company directors of an insolvent trading, if the company is undertaking a restructure outside formal insolvency processes. Reforms impose restrictions on the enforcement of ipso facto clauses in contracts, to facilitate restructures through voluntary administrations, schemes of arrangement, and during receiverships.

03. In order to set up a company in Australia, the company requires a local director and a public officer in Australia, who would be the point of contact for the company. Even if the local director doesn’t have an active role in the company, they will still be regulated under the same laws and regulations as any other directors of the company.

The IR Global report includes contributions from 23 outside counsel across multiple jurisdictions. It touches on the key areas of director liability and governance mechanisms between board and c-suite executives; as well as current trends within regulatory agencies and courts of which in-house counsel should be aware.