You have to choose an article from Australian media and then you have to make a view, an opinion about the news that is published in Australian media. It has to be related to Corporations Act and Directors or Duties. Then lastly you have to make a short factual comment that refers to the media and make a conclusion about the law regarding the whole assignment.
Directors are the custodians of an organization’s governance as they manage corporations on the shareholders’ behalf. The Corporations Act of 2001 vests certain responsibilities and duties on directors. The director has a duty to ensure that their actions are undertaken in good faith and that he/she should give priority to the company’s interests (Asic.gov.au, 2018). In addition, a director has an obligation to ensure that their individual interests do not conflict with that of the company. This means that Jenny Huston failed to observe her duties as the former chairwoman of G8 Education. Huston had been charged with using her position as G8 Education’s director dishonestly. Evidently, she had used her position inappropriately for personal gain at the company’s expense. Furthermore, she authorized the provision of false information to a financial market operator. This resulted in the breach of Huston’s duty not to use information improperly to gain advantage for herself to the company’s detriment (Awlnsw.com.au, 2018). In the case of Linc Energy, the founder Peter Bond had the responsibility to provide accurate information and communicate Dunk Island’s inability to be reopened instead of insisting that it would resume operations when this was not the case. When directors are dishonest and do not stay informed about the company’s finances then it can lead to liquidation and shareholders losing their investment like is the case for Dunk Island.
Santos has taken the right move by conducting due diligence before it acquires Harbour Energy, a private equity firm based in the US (Kruger, 2018). However, the new board will not have adequate time to perform certain obligations before the acquisition. In order for a director to ensure that they are up-to-date with a company’s activities they need to question the staff and managers about the on-goings of the business (Asic.gov.au, 2018). The new directors will also need to assess how the proposed action to acquire Harbour Energy will affect the performance of the business especially because it involves a significant amount of money. Moreover, the directors may wish to seek professional help from outside to assist them in making an informed decision. Therefore, it would not be prudent for Santos to close the deal with Harbour Energy so soon yet the new board of directors has not been given enough time to get acquainted with what is happening in the company. This could result in liabilities for the directors if the deal is not successful yet they were not fully furnished with the relevant information.
The Sydney Morning Herald is a newspaper that is published on a daily basis in Sydney. Furthermore, it is one of the oldest and most influential newspapers in Australia (Encyclopedia Britannica, 2018). In the period of the 1950s and the 1960s, the newspaper was internationally recognized for showing its commitment towards responsible journalism and appealing to a diverse audience.
Generally, the law on the corporation’s act and the duties of the director are meant to protect the interests of the company, creditors, and the shareholders. For instance, directors are required to make a disclosure that is frank and complete so that shareholders can make well-informed decisions. This means that individuals should avoid being appointed as director if they lack the capability, willingness and enough time to perform the obligations of a director in order to avoid liabilities like the one that Huston had to bear.
Asic.gov.au. (2018). Directors' key responsibilities | ASIC - Australian Securities and Investments Commission. [online] Available at: https://asic.gov.au/for-business/your-business/tools-and-resources-for-business-names-and-companies/asic-guide-for-small-business-directors/directors-key-responsibilities/ [Accessed 17 May 2018].
Awlnsw.com.au. (2018). What are the Duties of Directors? [online] Available at: https://www.awlnsw.com.au/assets/Latest%20news/Duties%20of%20Directors.pdf [Accessed 17 May 2018].
Encyclopedia Britannica. (2018). The Sydney Morning Herald | Australian newspaper. [online] Available at: https://www.britannica.com/topic/The-Sydney-Morning-Herald [Accessed 17 May 2018].
Kruger, C. (2018). G8 Education's former chairwoman faces 25 years in jail. [online] The Sydney Morning Herald. Available at: https://www.smh.com.au/business/companies/g8-education-s-former-chairwoman-faces-25-years-in-jail-20180403-p4z7i9.html [Accessed 17 May 2018].