Directors' duties and foreign bribery obligations

Key Points:

Personal liability for directors in connection with foreign bribery laws is a very real risk. D&O insurance is important, but will not cover all loss and exclusions can be problematic.

Compliance with foreign bribery laws is not only desirable and proper, but is an unavoidable cost of doing business in markets where corruption is widespread, particularly Africa and Asia.

Failure to meet the onerous obligations on directors raised by these laws can expose directors to criminal and personal liability.

The prospect of directors being individually pursued is high. The OECD recently strongly criticised Australia on its lack of enforcement and the AFP is now expected to be far more aggressive and to work closely with ASIC to pursue individuals and companies.