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ARTICLE · 03 SEPTEMBER 2009

The James Hardie Decision

Norton Rose Fulbright Australia
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The decision highlights the importance placed on the role of directors (both executive and non-executive) and senior executives when considering and implementing important strategic matters of a company.

AustraliaCorporate/Commercial Law
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Article by Katherine Czoch and Michelle Mulder

The Australian Securities & Investments Commission (ASIC) commenced civil proceedings in the Supreme Court of NSW against James Hardie Industries Limited (JHIL), James Hardie Industries NV (JHINV), seven former non-executive directors and three former executives of JHIL for breaches of the Corporations Act 2001 (Cth) (Act) in relation to the preparation and approval of public statements.

The decision is significant because it is the first time that ASIC has successfully prosecuted non-executive directors. The decision highlights the importance placed on the role of directors (both executive and non-executive) and senior executives when considering and implementing important strategic matters of a company. Aside from the corporate governance issues, the decision raises ASIC's increasing focus on non-executive directors and senior executives below board level.

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