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Director Laws Damage Corporate Australia, Says Survey

Global Glimpses | November 5, 2010

Australia’s tough laws on director liability are hurting the country’s economy and discouraging people from taking on board roles, according to a new survey.

A third of directors had turned down a seat on a company board because of the risk of personal liability, said a survey by the Australian Institute of Company Directors (AICD). And one in five had resigned a board job for that reason.

The survey found that fear of personal liability had led 65 percent of directors to take decisions they felt were “overly cautious.” Their main concern was being punished for decisions taken in good faith—three quarters said there was a “medium to high” risk of that happening.

And eight out of ten directors in the survey said they were concerned that the time their...

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