Case Study: ASIC v. Healey (2011) - Directors' Duties and Implications

This case study analyzes the ASIC v. Healey (2011) case, focusing on the duties and responsibilities of company directors under the Corporations Act 2001. The assignment examines the implications of the judgment, highlighting the importance of non-delegation of duties, financial literacy, and the role of management. It references key sections of the Act, including sections 180, 181, 344, and 601FD, to illustrate the legal obligations of directors. The case underscores the significance of acting in good faith, exercising due care and diligence, and prioritizing the best interests of the company and its members. The analysis also includes insights from relevant academic sources and case notes, providing a comprehensive understanding of the legal and practical implications of the judgment. The case study emphasizes the need for directors to be actively involved in company affairs and possess the necessary financial acumen to fulfill their duties effectively.

CORPORATION LAW

ASIC v. Healey (2011)
The directors were characterized as
agents of the entities:
 were required to deliver utmost skills,
diligence as well as care in exercising
their duties and responsibilities;
 Take active in the affairs of the
company;
 Shall be financially literate.

DUTIES AND RESPONSIBILITIES
BREACHED
 Section 180 (1) of the Corporation
Act, 2001 (hereinafter referred as the
Act);
 Section 181 of the Act;
 Section 344 (1) of the Act, and
 Section 601FD (3) of the Act.

Section 180(1) of the Act
It says that:
 every director and officer of a
company
 shall exercise their responsibilities
 anddischarge their duties
 in a manner which a reasonable
person would have exercised if
he/she was occupying the respective
position in the company.

Section 181 of the Act
The section essentially requires the
directors to:
 Act in good faith, and
 For the purpose of the welfare of
corporation

Section 344 and 601 FD of the Act
 Section 344 makes the officers liable
for contravening the provisions of
section 324DAA, DAB and DAC, or
Part 2M.2/ 2M.3.
 Section 601FD imposes the statutory
duty is inclusive of acting honestly, in
a careful and diligent manner,
prioritizing the best interest of the
members and ensuring their welfare

IMPLICATIONS OF THE JUDGMENT
The most important contributions of
the judgement are:
 non-delegation of one’s duty,
 non-reliance on knowledge of others,
 financial literacy of the officers, and
 role of management.

REFERENCES
 Giordano, F., 2011. Company Secretary: Financial
Reporting Duties of Directors-Ten Corporate
Governance Lessons from Centro for Non-Executive
Directors of Listed Public Companies. Keeping good
companies. 63(7). p.390.
 Smith, D.K., 2012. Governing the Corporation: the
Role of Soft Regulation. UNSWLJ. 35. p.378.
 Centro (Asic V Healey) Case Note: Directors’ Duties
For Financial Statements, 2011. [Online]. Available
through: <https://www.brightlaw.com.au/centro-asic-
v-healey-case-note-directors-duties-for-financial-
statements/>. [Accessed on 15th January 2017].

Thank You