Originally Posted by BHMvictim
I would have thought that Qantas has an obligation FIRST AND FOREMOST to the traveling public, to provide a safe means of getting from A-B.
This is the BIGGEST problem with Qantas. Obligations to investors. Management are forgetting that they also have an obligation to provide safety for those traveling on its planes.
The primary obligation of an airline is the safety of its passengers, not to making money for it's shareholders.
Unfortunately, legally Swingy is correct. A company's directors' first responsibility is to the shareholders; any derogation from this can land them in the Long Bay beach resort.
Then, there will be various laws which they have to adhere to on an operational basis.
Safety is one of those; but it only hits the directors in terms of: "If we don't comply with this safety rule, either a) we'll get fined, and/or b) there'll be a smoking hole in the ground, either or both of which outcomes will detract from our duties to our shareholders".
S.180 (1) of the Corporations Act 2001 requires that directors "... must exercise their powers and discharge their duties with [a] degree of care and diligence... "; s.181 then specifies that directors must act in good faith in the best interests of the corporation. The duty of 'care' which thus arises out of s.180 is therefore one of care towards the interests of the members of the company - ie. the shareholders.
Safety requirements are then mandated in an operational context.
Interesting paper at
http://www.law.unimelb.edu.au/cclsr/...ors-duties.pdf
As a result, the director's duty is to strip safety to the bone, such that aircraft won't fall out of the sky and by doing so, cost the company money. They're cheating their shareholders if the 'over-engineer'.
Scary, perhaps, but true.