[LINK] Hardie's Decision ...

[Steven Clark]

On 18/12/10 08:59, Frank O'Connor wrote:
> http://www.theage.com.au/business/hellicars-board-ban-overturned-20101217-190uy.html
>
> So,
>
> 1. Non executive directors aren't responsible for the actions of the 
> board's they sit on, unless they have been extensively briefed on all 
> matters - and they have no oversight responsibility at all.
This is not new to anyone in/around corporate governance. Directors are
part of a group. Non-executive directors are just that - they have no
executive power: they're there to advise, to be part of discussions.
Those with voting rights have some say. But they're generally not in
position to *do* much of anything.

> 2. Non executive directors (and presumably their executive brethren) 
> can sign off on the Minutes of meetings, but that is not to be taken 
> seriously.
At law. a non-executive director is quite different to an executive
director: just as a minister is different from a back-bencher. They have
no way to exercise direct *power*, and thus are not directly held
accountable for its exercise.

To punish someone who could do nothing has long been considered unfair
by our legal system (drawing that notion from Chancery, via the Church
... the Church of England).

> 3. The corporate veil protects everyone who would otherwise be 
> responsible for the acts or omissions of a company, seemingly without 
> restriction.
Not entirely true. There are circumstances where the veil can be
pierced. In any event, the veil exists, in part, because of the legal
construction of what a corporation *is*.

It is worth noting that a corporation is a separate legal entity, having
it's own personality at law: it is a legal person by dint of recognition
as such under the Corporations Act. Individual *natural* persons, agents
of a corporation, *can* be held accountable - but generally only where
their actions are, of themselves, illegal (usually criminal acts such as
fraud, or murder).

The company is a separate legal entity to the individuals who make up
it's board of directors, or it's executive. The legal purpose of a
corporation is to protect the investor(s)' investment(s) in the
enterprise. For the most part, it is the investors who have the most
powers to hold corporate officers to account. Though most of those
powers are designed to address fraud and mismanagement - again, to
protect the investor(s)' investment(s).

To hold a human accountable, you must, under our law, have sufficient
evidence that the human being in question was personally (and directly)
responsible for a breach of the law at the time the act (or omission)
was committed. By sufficient, the law requires either beyond reasonable
doubt (for crimes), or on the balance of probabilities (civil actions)
that the person committed the offence. And that has to be the whole
offence, not part of it.

Proving that, in court, is not as simple as movies or television present
it to be.

> Hey, with Hardie it looks like the government is picking up the $2 
> billion tab ... no matter what the politicians say ... so if the 
> company isn't going to be held to account, why should we hold the 
> directors to account?
A lot depends on what you mean by 'hold to account' ...
> And what the heck, now that the company is permanently resident 
> off-shore why should they be held responsible for what happens to 
> thousands of dying asbestos sufferers in Australia?
>
> The corporate veil, guys. Our judicial system seems to live (and let 
> thousands of others die) by it.
No. Our existing system of corporate governance lives by the corporate veil.

Changing *that* will require legislation. Which has been pointed out
time and again by judges, lawyers, and law reform inquiries.

> The question now remains as to why these people (directors, 
> politicians, judges etc) are remunerated in any way given that they 
> are not responsible or accountable or even look to have the 
> responsibility and accountability applicable to a three year old 
> child.
A three-year-old child has far more immunities than any adult.

Directors are accountable to shareholders; politicians to the
electorate; judges to the legal community.

There are unfair situations occurring everyday. Justice is a complicated
process. Many held to account feel just as outraged as those who feel
they haven't 'got justice'. No system is perfect. They're all filled
with people. People just like us.

> Just another one of those inexplicable facts of life like why we are 
> hit with penny ante-ing credit card charges by those traders we deem 
> worthy of our custom, why delivery services never actually deliver 
> any more (they simply whack a note in your letter-box telling us 
> where the item can be picked up), why power and utility charges can 
> increase by a factor of 80% in a year and we just go along with it, 
> why false advertising and outright lies are de riguer in our 
> corporate sector, why telecommunications products are so confusing 
> and comparatively more expensive each year (one would have thought 
> that the 'efficiencies' the telcom executives boast about would have 
> led to reduced costs) why bank fees and charges can become so legion 
> and why both depositors and borrowers can be ripped off on interest 
> ... the list is legion and, hey ... the apathy of our times I guess.
Commerce has never favoured the little person, the customer, the 'consumer'.

I'm not sure that everyone is 'just going along with' all these changes.
But to effect real change requires motivation in political and
commercial circles. It *can* start with Joe Average Consumer, but unless
a significant proportion of that population act in concert - and have
the favourable pen of the Press - the individual will always tend to be
drowned out by the Behemoths and Leviathans.

Me, I look to self-help somewhat - but then I am reasonably well
educated; if somewhat disadvantaged by class and origin (working/middle
and regional/rural).

> We just take it up the ass.
Tried negotiating with a bank lately?
> I love this country ... given a skerrick of a chance our so called 
> leadership (government, business, financial, judicial or whatever) 
> will abrogate their duties, rip of those they are supposedly 
> accountable to, commit all manner of crime and misdemeanor, and 
> maintain that they are not responsible or accountable for anything 
> bad that happens of their so-called 'watch'.
So, they're still human then?

I'm not so sure that so many are so corrupt. Other nations have that
scourge in far greater excess.

> Why do we tolerate these clowns? Why do we let ourselves be ripped off?
A lack of pitchforks and firearms?

Or the busy minutiae of daily life?
> Just a rhetorical question folks ... I'm well aware is that the 
> answer is we get what we deserve.
I'm not so sure about that. Not everyone has the *means* to affect
change. But many who do are blissfully (or blessedly?) oblivious to the
woes of others, caught up as they are in their own misfortunes.

The needle-prick can be a crisis to one who has never known pain. Just
as yet-another-crushing-blow may be see as one's lot after many, many
before it.

Australia used to the The Lucky Country, but I suspect we've bought into
our own insular world views - and perhaps some of the advertising.

Many have become more intolerant, more self-interested as circumstances
have changed in ways that didn't favour them; or in ways that happened
to favour them enormously.

-- 
Steven