Board of directors take on a massive risk to the point they can be sued and have their own personal assets frozen
But do they in reality? Please document directors of ASX companies who have actually been sued and had their assets confiscated/frozen in the last 10 years.
Here's a snippet of who got away: CENTRO
Stephen Cougle, the man who audited Centro's books in 2006-07, misclassifying $2.1 billion worth of debt, and is now partner at PricewaterhouseCoopers, has promised the corporate watchdog he will not do any auditing work for two and a half years.
As a company director, if you are going to make a $1.5 billion mistake in your accounts, make sure it's an honest one.
The Federal Court yesterday handed down its decision on penalties for members of the Centro board found to have breached the Corporations Act in relation to Centro's 2007 financial statements.
While there had been grumbling from the professional directors' league at the original decision, there was a wider view that directors must be held to account for checking the accuracy of accounts. Indeed, it is one of the fundamental tasks of a board member.
There is likely to be plenty of talk at dinner parties in Mosman and Toorak this weekend about the lightness of the penalties imposed yesterday - coupled with some sense of relief.
Only the company's then finance director, Romano Nenna, received disqualification orders (two years), while the chief executive, Andrew Scott, was given a fine of $30,000.
We could then visit the James Hardies affair, and the directors who deliberately cheated the victims of a compensation fund & made false statements about it - small fines & minor disqualifications as directors. The list goes on.
There is a widespread gulf between the law statutes, "potential penalties" the reality at the sharp end of a prosecution. In just the same way Eddie Obied and his family will walk away with the best part of hundred million or so for massively corrupt behaviour. The talk is tough, the reality is likely to be a smack over the wrist with a wet feather duster. Sure they have to endure a period of the pain during public scrutiny, I will concede that.
So go away with your fanciful ideas that these people are ever likely to be held to account in any meaningful way that involves significant personal pain. Quite frankly, the law is a joke
: THE MYTH OF THE RULE OF LAW