Still a sleepy hollow? Directors’ liability and the business judgment rule

Harris, J; Hargovan, A

Still a sleepy hollow? Directors’ liability and the business judgment rule

Harris, J

Hargovan, A

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Publisher:: LexisNexis Australia
Publication Type:: Journal Article
Citation:: Australian Journal of Corporate Law, 2017, 31 (3), pp. 319 - 343
Issue Date:: 2017-03-03

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Field	Value	Language
dc.contributor.author	Harris, J https://orcid.org/0000-0001-7099-4694	en_US
dc.contributor.author	Hargovan, A	en_US
dc.date.available	2020-05-25T19:03:34Z
dc.date.issued	2017-03-03	en_US
dc.identifier.citation	Australian Journal of Corporate Law, 2017, 31 (3), pp. 319 - 343	en_US
dc.identifier.issn	1037-4124	en_US
dc.identifier.uri	http://hdl.handle.net/10453/123342
dc.description.abstract	The statutory business judgment rule was introduced in Australia in 2000 after a lengthy process of consultation and debate. The rule was aimed at alleviating fears that directors may have that their commercial decisions made in good faith and for the benefit of the company would be subject to second guessing by the courts through litigation alleging a breach of the duty of care and diligence. Since 2000 there have been only a few decisions that have discussed the rule, giving credence to the prediction that it would be a sleepy hollow rather than a safe harbour. Fifteen years on, the rule was recently successfully relied upon for the first time in ASIC v Mariner (2015) but in circumstances where a breach of duty of care was not proven. Significantly, the rule remains a hot topic for public debate with the AICD and Dr Robert Austin proposing amended business judgment rules. This article reflects on the past 15 years of the statutory business judgment rule and assesses the case for law reform advanced by the private sector.	en_US
dc.publisher	LexisNexis Australia	en_US
dc.relation.ispartof	Australian Journal of Corporate Law	en_US
dc.title	Still a sleepy hollow? Directors’ liability and the business judgment rule	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	31	en_US
utslib.for	1801 Law	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1503 Business and Management	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Law
utslib.copyright.status	open_access
pubs.consider-herdc	true	en_US
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	31	en_US

Abstract:

The statutory business judgment rule was introduced in Australia in 2000 after a lengthy process of consultation and debate. The rule was aimed at alleviating fears that directors may have that their commercial decisions made in good faith and for the benefit of the company would be subject to second guessing by the courts through litigation alleging a breach of the duty of care and diligence. Since 2000 there have been only a few decisions that have discussed the rule, giving credence to the prediction that it would be a sleepy hollow rather than a safe harbour. Fifteen years on, the rule was recently successfully relied upon for the first time in ASIC v Mariner (2015) but in circumstances where a breach of duty of care was not proven. Significantly, the rule remains a hot topic for public debate with the AICD and Dr Robert Austin proposing amended business judgment rules. This article reflects on the past 15 years of the statutory business judgment rule and assesses the case for law reform advanced by the private sector.

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http://hdl.handle.net/10453/123342