Question

The Corporations Act 2001 (Cth) provides defences for director’s conduct that may otherwise breach sections of the Act. Identify these defences for directors and explain how these defences can be applied in relation to that particular breach.

Answer 1

The Corporations Act imposes a number of additional fiduciary duties on directors of entities incorporated under that legislation. The Queensland Government has established a number of special purpose companies (incorporated under the Corporations Act) which operate under the auspices of a number of departments. Details of these companies can be found in the relevant department's annual reports.

Individuals appointed as directors of companies must comply with the Corporations Act in carrying out their duties. Although persons who are appointed to Government Boards which are not companies are not specifically bound by the Corporations Act, the duties discussed below parallel the common law duties to which Government Board members must adhere.

Under the Corporations Act, directors are required to:

• act in good faith and for a proper purpose
• act with care and diligence
• avoid improper use of information
• avoid improper use of position
• disclose certain interests.