A better outcome for whom? Unpacking the safe harbour reforms

What you need to know

• Australia's safe harbour legislation is not explicit as to the meaning of, or the considerations that will inform, a "better outcome for the company" which is the concept underpinning the protection afforded to directors under the new regime.
• Rather than attempting to balance often misaligned interests of shareholders and different classes of creditors, directors ought to focus on the 'enterprise value' of the company.
• Such an approach is consistent with directors' duties in the zone of insolvency and aligns with the rationale of the safe harbour reforms, being the avoidance of value destruction.