The duties and liabilities of persons below board level

Abstract

Under recent recommended changes to the Corporations Act 2001 (Cth), managers, consultants and advisers who ‘take part in the management of a company’ will face a new risk of liability under key statutory duties even though they may not act in any position as a director. The proposals are claimed, in part, to simply correct an oversight in amendments to definitions in the legislation which took effect in 2000. However, this article suggests the implications are much more significant. The class of persons who may be caught under the proposed amendments are very broad and the risk of liability to those persons, because of other ongoing legal developments affecting corporate governance, are much greater than may first appear. Corporate managers, consultants and advisers, even in one-off relationships with corporations, need to be very careful about how their roles may be classified. Particular risks will exist where their work and advice relates to the provision of information and decision making affecting the solvency of the company.