The ALRC's preliminary findings are significant - including an over-proliferation of criminal offences in Commonwealth law (more than 2,800 corporate criminal offences, including for trivial offences) that dilutes the rationale for criminal liability and adds significantly to regulatory complexity.

The AICD supports important elements of the ALRC's proposals, including drawing a principled distinction between corporate criminal and civil liability and to better target corporate criminal liability and defences.

The AICD also welcomes the ALRC's recognition of the oversight role of the board, distinct from executive management, and the importance of targeting liability for corporate conduct.

While it is critical that corporations and individuals are held liable for corporate misconduct, the AICD is concerned that proposals that reverse the civil onus of proof for senior management and pierce the corporate veil go too far.

In a broad-ranging proposal, the ALRC has recommended that any officer who was in a position to influence the conduct of a body corporate should be subject to a civil penalty, where the corporation has committed an offence. The onus would then be on the individual to show that they had taken reasonable measures to prevent the contravention.

In addition to legal principles there are practical implications that warrant careful consideration. For example, it could deter individuals from taking on senior executive positions, further entrench a risk-averse corporate culture, and help to drive up already ballooning directors and officers insurance costs.

The ALRC's paper proposes a new attribution model for corporations to be held criminally liable for offences that raises concerns and requires detailed assessment.

The AICD looks forward to considering the ALRC’s proposals in detail and contributing to the public consultation process.

Media Contact: Maegen Sykes 0439 167 567

The AICD is the independent and trusted voice of governance, building the capability of a community of leaders for the benefit of society. Our membership of more than 44,000 includes directors and senior leaders from business, government and the not-for-profit sectors.