Director Liability For Corporate Outsourcing Failures

Summary

• Directors can be personally liable for outsourcing failures if they breach their duties under the Corporations Act, particularly the duty of care and diligence.
• Certain obligations, including tax, superannuation, workplace safety and environmental compliance, can apply directly to directors even where work is outsourced.
• Outsourcing does not remove a director’s responsibility to oversee operations and ensure compliance.
• This article explains when Australian business owners and directors may be personally liable for outsourcing failures and outlines key legal risks and protections.
• It is written by LegalVision’s business lawyers. LegalVision, a commercial law firm, specialises in advising clients on directors’ duties and corporate governance.