Navigating Governance During Financial Distress

An overview for Australian directors

Overview

Financial distress for a company always places additional emphasis on governance—and on the duties of the directors of the company. The Australian legal system has a clear system of duties for directors—a period of financial distress adds different dimensions and points of emphasis to those duties, and can bring additional risk for the individual directors in the event of a subsequent formal insolvency appointment.

To govern well during a time of financial distress (and to minimize risk for the directors of breaching their obligations), it is important that directors are familiar with how these duties operate during that time. This overview provides that familiarity for directors. It is not intended to be exhaustive. If you require detailed advice on any of the topics outlined, please contact us so that tailored guidance can be provided.