An Empirical Analysis of Public Enforcement of Directors’ Duties in Australia: Preliminary Findings
36 Pages Posted: 18 Apr 2016 Last revised: 19 Apr 2016
Date Written: March 4, 2016
This paper presents the preliminary findings of an empirical analysis of sanctions imposed in proceedings brought by Australian Securities and Investments Commission (ASIC) and the Commonwealth Director of Public Prosecutions (CDPP) for contraventions of the directors’ duties provisions of the Corporations Act 2001 (Cth) and its predecessor, the Corporations Act 1989 (Cth), from 1 January 2005 to 31 December 2014. The preliminary findings presented in this paper indicate that criminal enforcement was more prevalent than civil enforcement and there was a significant emphasis on incapacitative sanctions such as prison sentences and management disqualification orders. Monetary sanctions were less frequently imposed and tended to be of a low magnitude relative to the statutory maximum sanctions. Criminal and civil enforcement had similarly high success rates and the civil enforcement process was only slightly faster than the criminal process, suggesting that criminal enforcement is as effective as civil enforcement from a procedural perspective. In sum, both ASIC and the CDPP play a significant role in enforcement of directors’ duties and there is a strong focus on enforcement via incapacitation.
Keywords: directors' duties; enforcement; sanctions
JEL Classification: G18; G28; G38; K22; K41; K42
Suggested Citation: Suggested Citation