Why not litigate? That is the question.
As a director, you are responsible for oversight of the affairs of the company.
As a director, you must be fully up-to-date on what your company is doing, including its financial position, question managers and staff about how the business is going and take an active part in directors’ meetings.
When you make a business decision as a company director, you must, amongst other things, ensure that you (among other things):
- do not have a material personal interest in the decision and make it in the best interests of the company
- keep informed about your company’s financial position and performance, ensuring your company can pay its debts on time
- make full and frank disclosure about any material personal interests you do have
The chairman of the corporate watchdog, James Shipton, did not tell senior colleagues for more than a year that the Auditor-General had raised concerns about a housing allowance of almost $70,000 paid to one of his deputies, acting chairwoman Karen Chester has said.
She said the full leadership commission at ASIC was not aware of Mr Shipton’s $118,557 KPMG tax services bill that was paid for by ASIC in 2018, until after the Australian National Audit Office expressed concern in September this year.
Ms Chester suggested that most of the commission was kept in the dark about the auditor taking issue in August 2019 about $750-a-week housing payments for Mr Crennan after he relocated from Melbourne to Sydney for work.
ASIC has pursued the organisations is regulates for less. Consider paragraph 109 from Justice Beach’s judgement in ASIC vs Harold Mitchell:
109 Further, ASIC says that by not disclosing to the TA board at its meeting on 3 December 2012 the level of interest of Network Ten in the domestic broadcast rights, Mr Mitchell contravened s 180(1). Further, he contravened s 182(1) because he used his position improperly as he concealed relevant information from the board on a subject of financial significance for TA to gain an advantage for Seven.
So the question at hand is … why not litigate?