The High Court of Australia has this week upheld the finding
that seven former non-executive directors of James Hardie made misleading
statements about the adequacy of asbestos compensation funding.
In 2009 the Supreme Court of New South Wales found former
James Hardie non-directors had breached the Corporations Act when making the
statements in 2001.
In 2010, the non-executive directors successfully appealed
against this decision. But the Australian Securities and Investment Commission
(ASIC) appealed against the decision in the High Court the following year, and
“The case brought into sharp focus the fundamental
responsibilities of both executive officers and non-executive directors who are
ultimately responsible for significant public company decisions, and the
release of information concerning those decisions, to the share market,
employees, creditors and the public,” said ASIC Chairman Greg Medcraft.
AMWU National Secretary Paul Bastian also welcomed the
decision but questioned whether the law was tough enough on directors and
“The Corporations Law needs real teeth to stop fraudulent
conveyancing of finances and to be able to pierce the veil of multiple company
holdings,” Bastian said in a media statement.
“It also needs to hold corporate directors to account for
their moral behaviours and to be able to impose lasting and meaningful
penalties on them such as having to attend death-bed hearings of victims and
their families or imposing heavy community duty fines.
“This is not simply about numbers on the bottom line or
about misleading statements. It is about people’s lives.”