DIRECTORS’ AND OFFICERS’ RESPONSIBILITIES: A TIMELY REMINDER

In the James Hardie case the High Court clarified that the responsibilities of any officer of a company is a question of fact. The role of a person does not identify the responsibilities of that officer in a company. The responsibilities cannot be identified by reference to the role of a person with same title in another company or with the same company.

The High Court noted that the Corporations Act Section 180, Responsibilities of Directors and Officers are not limited to statutory responsibilities, but include whatever responsibilities the officer concerned had with the corporation regardless of how or why those responsibilities came to be enforced on that officer. An officer who is not a director, or the company secretary, with Section 180 responsibilities makes or participates in making decisions that affect the whole or a substantial part of the business of the Corporation.  The High Court clarified in this case that the officers also include persons who are not responsible in the final decisions but, nevertheless, participate in a substantial way to the ultimate decisions that substantially affect the business of a corporation. Officers’ responsibilities depend on their qualifications and their actual responsibilities within their corporation.