the origins of company directors’ statutory duty of care. The findings of their archival research include that, contrary to what is said in some court judgments and corporate law commentaries, the first statutory duty of care in Australia, and arguably the common law world, was introduced in the State of Victoria in the Companies Act 1896 (Vic). A later version of the duty, in the Companies Act 1958 (Vic), introduced public enforcement of the duty. Although the implications of this development may not have been appreciated by those participating in the debates regarding the introduction of the 1958 Act, the authors show, through discussion of recent cases involving the statutory duty of care, how the Australian Securities and Investments Commission (ASIC) is now influencing governance standards in Australian boardrooms through the litigation it commences. ASIC is not only an active plaintiff in cases based on the statutory duty of care — using it more than private plaintiffs — but it also typically pursues a public interest agenda in these cases in terms of the remedies it seeks against defendant directors.The Senate Economics References Committee report 'I just want to be paid': Insolvency in the Australian construction industry endorses the Director Identification Number (DIN) discussed in the Productivity Commission report noted earlier this month.
The Committee states
To register a company a person must lodge an application with ASIC. Under section 117(2) of the Corporations Act, the application must include the name and address of each director of the company. However, little is done to verify that information and consequently there is a lack of transparency surrounding the identity of company directors. The inability of regulators and participants in the building and construction industry to identify and track individuals suspected of illegal activity is a significant cause of the incidence of illegal phoenix activity. A lack of transparency around company directors means that regulators are slower in clamping down on illegal phoenix operators and therefore more innocent participants are caught up in schemes, suffering significant economic and social effects.The committee's report includes two recommendations in relation to Director Identification Numbers (DIN) -
Recommendation 36
The committee recommends that section 117 of the Corporations Act 2001 (Cth) be amended to require that, at the time of company registration, directors must also provide a Director Identification Number.
Recommendation 37
The committee recommends that a Director Identification Number should be obtained from ASIC after an individual proves their identity in line with the National Identity Proofing Guidelines.
