180(1) Discharge duties with the degree of care and diligence that a reasonable person would exercise
180 (2) A director makes a business judgment is taken to meet the requirements if they:
(a) make the judgment in good faith for a proper purpose; and
(b) do not have a material personal interest; and
(c) inform themselves .. to the extent they reasonably believe to be appropriate; and
(d) rationally believe that the judgment is in the best interests of the corporation.
Civil Obligation
Section 181 - Duty of good faith and to act for a proper purpose
181 A director or other officer of a corporation must exercise their powers and discharge their duties:
(a) in good faith in the best interests of the corporation; and
(b) for a proper purpose.
Civil obligation
Sections 182 - Use of position
(1) A director, secretary, other officer or employee of a corporation must not improperly use their position to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Civil obligation
Section 183 - Use of information
A person who obtains information because they are, or have been, a director or other officer or employee of a corporation must not improperly use the information to:
(a) gain an advantage for themselves or someone else; or
(b) cause detriment to the corporation.
Civil obligation
Section 588G - Duty to prevent insolvent trading
Section 180(2) Business Judgment Rule
Section 184 – Good faith, use of position and use of information—criminal
Subtopic 8
Subtopic 9
Subtopic 10
Subtopic 11
Subtopic 12
Subtopic 13
Subtopic 14
ASX
Corporate Governance
Principles and Recommendations
2007 2nd Ed.
ASX
Corporate Governance
Principles and Recommendations
2007 2nd Ed.
Lay solid foundations for management and oversight
Recommendation 1.1: Companies should establish the functions reserved to the board and
those delegated to senior executives and disclose those functions.
Recommendation 1.2: Companies should disclose the process for evaluating the performance
of senior executives.
Recommendation 1.3: Companies should provide the information indicated in the Guide to
reporting on Principle 1.
Structure the board to add value
Recommendation 2.1: A majority of the board should be independent directors.
Recommendation 2.2: The chair should be an independent director.
Recommendation 2.3: The roles of chair and chief executive offcer should not be exercised by
the same individual.
Recommendation 2.4: The board should establish a nomination committee.
Recommendation 2.5: Companies should disclose the process for evaluating the performance
of the board, its committees and individual directors.
Recommendation 2.6: Companies should provide the information indicated in the Guide to
reporting on Principle 2.
Promote ethical and responsible decision-making
Recommendation 3.1: Companies should establish a code of conduct and disclose the code or
a summary of the code
Recommendation 3.2: Companies should establish a policy concerning trading in company
securities by directors, senior executives and employees, and disclose the policy or a summary
of that policy.
Recommendation 3.3: Companies should provide the information indicated in the Guide to
reporting on Principle 3.
Safeguard integrity in financial reporting
Recommendation 4.1: The board should establish an audit committee.
Recommendation 4.2: The audit committee should be structured so that it:
• consists only of non-executive directors
• consists of a majority of independent directors
• is chaired by an independent chair, who is not chair of the board
• has at least three members.
Recommendation 4.3: The audit committee should have a formal charter.
Recommendation 4.4: Companies should provide the information indicated in the Guide
to reporting on Principle 4.
Make timely and balanced disclosure
Recommendation 5.1: Companies should establish written policies designed to ensure
compliance with ASX Listing Rule disclosure requirements and to ensure accountability at
a senior executive level for that compliance and disclose those policies or a summary of
those policies.
Recommendation 5.2: Companies should provide the information indicated in the Guide
to reporting on Principle 5.
Respect the rights of shareholders
Recommendation 6.1: Companies should design a communications policy for promoting
effective communication with shareholders and encouraging their participation at general
meetings and disclose their policy or a summary of that policy.
Recommendation 6.2: Companies should provide the information indicated in the Guide
to reporting on Principle 6.
Recognise and manage risk
Recommendation 7.1: Companies should establish policies for the oversight and management
of material business risks and disclose a summary of those policies.
Recommendation 7.2: The board should require management to design and implement the
risk management and internal control system to manage the company’s material business risks
and report to it on whether those risks are being managed effectively. The board should disclose
that management has reported to it as to the effectiveness of the company’s management of its
material business risks.
Recommendation 7.3: The board should disclose whether it has received assurance from
the chief executive offcer (or equivalent) and the chief fnancial offcer (or equivalent) that the
declaration provided in accordance with section 295A of the Corporations Act is founded on
a sound system of risk management and internal control and that the system is operating
effectively in all material respects in relation to fnancial reporting risks.
Recommendation 7.4: Companies should provide the information indicated in the Guide to
reporting on Principle 7.
Remunerate fairly and responsibly
Recommendation 8.1: The board should establish a remuneration committee.
Recommendation 8.2: Companies should clearly distinguish the structure of non-executive
directors’ remuneration from that of executive directors and senior executives.
• Specific guidelines for executive remuneration packages
• Specific guidelines for non-executive director remuneration
Recommendation 8.3: Companies should provide the information indicated in the Guide
to reporting on Principle 8.
Disclosure
"If not, why not"
Identify the recommendation(s)
not followed
Explanation as to why the
company has not followed
the relevant recommendation
Accordance with the ‘spirit’
of the relevant Principle