Corporate laws are defined and explained in accordance with the statutory requirements and also to facilitate corporate environment so that in the long run sense of accountability, transparency and compliance in effective manner can be ensured. Corporations act 2001 also aim at maximum for the benefits of various stakeholders and also for ensuring compliance with legal and regulatory requirements in effective and durable manner (Marcel, 2201). Recent amendments in treasury laws also show intention of public officials to provide comfort to private sector and also directors so that their due role for benefits of organizations and also towards ensuring compliance and transparency of legal and corporate affairs can be enhanced at substantial levels. Business management and owners as per laws must work in synthesized manner so as to pocket at the maximum edge and enhanced position among competitors and positive image among valued customers respectively.
Directors who enjoy stewardship role in organizations indeed have sound grip over financial and technical affairs of it but such key positions also demand extra care and attention to those matters that affect at substantial level integrity and viability of an organization. Directors interact in close association with owners of the entity and are supposed to ensure and watch interests of various stakeholders of an organization and also to provide accurate, reliable and complete information to business owners on timely basis for effective decision making. Section 180 of corporations act 2001 has clearly explained duties and role of directors towards organizations.
Recent moves as per treasury laws amendment 2017 have indeed affected position of directors in an organization and also magnified role of directors towards corporate matters in particular related to restructuring and insolvency issues that demand utmost attention in view of market and economic conditions affecting directly or indirectly business affairs at large. Earlier directors were supposed to take on personal obligation in case business is facing insolvency position and also matters that affect business position in terms of restructuring or elimination of any layer of business or merger of two divisions of business. Such move has been intended with the move to align treasury laws amendment 2017 in accordance with global environment where laws in relation to corporate environment are made to facilitate at the maximum level for owners in particular and others in general. Earlier such act used to provide legal requirements that directors assume personal obligation towards financial affairs of an organization in case of insolvency until all legal aspects are settled in letter and spirit. As per provisions of treasury laws amendment 2017 directors possess comprehensive information pertaining to financial affairs and also work in close interaction with auditing entities and business evaluators therefore new amendments in the law aim at working for company so that it may reinstate its earlier position in case same faces hardships or other critical circumstances instead of withdrawing at all towards voluntary administration or liquidation which indeed affect business credibility among industry segments and business circle (Phillip, 2017).
Government of Australia has indeed highlighted impact of new amendments in such act and quite hopeful for appreciation from corporate environment and positive impacts at collective level since it is much flexible in nature as compared to previous provisions of law. Part 1 of corporation’s act 2001 has also reflected such changes in accordance with Australia’s insolvency laws so that directors may assume role of stewardship and caring individuals for organizations as they own these instead of assuming them in employment relationship and thus limiting them in a fix by neglecting critical and sophisticated affairs and vice versa.
Part 1 of the amendment has produced sound impacts on the corporate environment and now directors of the company will ensure sound impact on business structures and other policies of the company that may provide long term benefits at all at collective levels. Such amendments are intended to bring sound changes in mindset of directors in relation to regulators that they always aim at fostering cemented relationships among public officials and corporate community and remain watchful of brining any positive initiative that provide benefits to all instead of one segment of the society respectively (Helen Bird, 2017). Previously directors were assumed to take on personal obligations towards matters affecting business of organization and remain on the brisk of risk and extra uncertainty since legal limitations used to insist them to follow strict guidelines and in case they had no financial resources at enough level then courts were supposed to contribute towards these matters and thus as a whole business repute were at risks owing to litigation issues.
Directors hold key positions in a company and for an economy of Australia which enjoys prominence in international community regulators have assumed that role of corporate and private sector in building of an economy and strengthening its base can never be ignored at all therefore such amendment has been introduced since now things need to be aligned in accordance with the overall scenario as companies incorporated in Australia under corporations Act 2001 also interact with global business and any contradiction in legal requirements of different countries in the end urge regulators to move in line with international norms and trends in comprehensive manner. New amendments are much flexible and facilitating for corporate environment and in particular directors will feel much comfort since in the end obligation in relation to overall matters of an organization fall on their shoulders and owners expectations always move at extra ordinary level from directors since they act as guardians of their interests in company and vice versa (Phillip, 2017). Business growth, innovation and cultural innovation in the business environment are those forces that always demand something different from directors being key personnel in the company and owners in general so as to keep in touch with modern industry trends and vice versa. Amendments to treasury laws amendment indeed will provide edge and sound relief to directors to magnify their due role in corporate entities and also work in close interaction with key stakeholders and regulators to ensure sound control over company’s affairs and also in case of changes in business structure or matters affecting administrative or controlling factors of business entities at large.
Previous law of corporation act 2001 before such amendment used to provide limitation in terms of safety for directors of a company and also it supposed from directors to remain in a fix in terms of technical and sophisticated legal matters at large. Cultural changes, innovation and security of business interests are those hall marks that introduce real skills and capabilities of directors in enhancing and expanding business base and credibility. Earlier clauses of law had limited exposure and benefits and did not reflect true market conditions and trends prevailing across the corners of the world. At international level things never remain static whether it is corporate environment or even a sole trader business and continuous innovation and focus towards collective betterment at certain stage urge for positive and realistic change at all for providing benefits to the masses. Directors keep control of the company’s affairs and also work as guardian of public values apart from accountable to owners of the business who never become ready to compromise over aims and objectives as defined earlier. If directors are exerted to face undue pressure and legal limitations then they cannot produce expected results and also ensure hundred percent compliance and implementation of corporate regulations.
Directors were assuming personal liability towards organizational matters earlier which mean although they were not owners of the business but their role was nothing less than owners in case business moved towards restructuring, change in administration, closure or hostile takeover in extreme circumstances at large (Helen Anderson, 2012). Apart from that at collective level a suitable and practical approach was not agreed in corporate community over such matter of unlimited liability of directors in case of winding up of a company and such situation was indeed worrisome and pathetic for those corporations that had no much financial health and sustainable position in the industry. All of the above circumstances and other aspects indeed provide limitations in terms of watching of interest of directors in particular and other stakeholders in general and thus it can be largely determined that such new current law should be maintained as it is quite comprehensive and descriptive in nature and quite beneficial and comfortable for corporate leaders who always face stress and pain in achievement of organizational aims and objectives.
Previous law in relation to directors’ obligations in corporate environment provides limited exposure and there are various inherent limitations in it which can be explained in a step by step manner as per rational and professional approach. First earlier law used to secure interests of owners at large by providing them safety in case of liquidation or business acquisition and obligation used to fall on directors since they were leading the company and apart from the fact that their role was under employment relationship they were treated as owners of business by holding them personally liable towards financial aspects of an organization in case it faces critical circumstances (Goldman, 2001). Second there was lack of transparency in the corporations’ act 2001 in accordance with prevailing corporate environment at global level and other legal requirements for corporate entities that other countries used to follow. In this situation how it is possible that corporate environment and major internal stakeholders of corporations I-e directors can perform well their professional obligations and also consider them responsible towards financial obligations in quite well organized manner when no conducive and encouraging factors were there for them at substantial level under the shadow of law as per corporations act 2001 prevailing in Australia.
Third which is the foremost reason for not recommending reenactment of previous law is that it is not being appreciated among business community at overall level as directors although assume overall obligations for organizations but each and every matter from minor to major level can never be controlled by them at absolute assurance level and sometimes international and national economic circumstances even urge owners towards forced windup or closure of business or sometimes business relations with major clients may face sudden setbacks that result in financial losses owing to which existence of business comes under jeopardy (Grantham, 2001). All of these aspects clearly indicate limited exposure of previous law and therefore same can never be recommended for reenactment and it must be replaced by new amendments so as to provide sense of shelter to directors and other stakeholders in terms of legal and regulatory requirements respectively.
From above discussion it has been assessed and determined at reasonable and significant manner that current law is providing more realistic and comfortable picture for various stakeholders of a business and also for directors changes have been introduced in case of insolvency issues of the company. There are various benefits that can be observed with critical and reasonable assessment that role of directors in organizations have become more refined in terms of controlling factors owing to recent amendments in part 1 of corporations act 2001 and now they own more interest and commitment towards their stewardship role in organizations at substantial levels. New amendments are much flexible and facilitating for corporate environment and in particular directors will feel much comfort since in the end obligation in relation to overall matters of an organization fall on their shoulders and owners expectations always move at extra ordinary level from directors since they act as guardians of their interests in company and vice versa. Business growth, innovation and cultural innovation in the business environment are those forces that always demand something different from directors being key personnel in the company and owners in general so as to keep in touch with modern industry trends and vice versa.
Apart from that there is a need for further improvements in laws since room for improvement always remain there apart from the fact that how well explained and introduced in accordance with legal and professional environments to which these relate (Michael, 2004). First status of directors as per law in corporations act 2001 must be explained in a stated word after new amendments as stewardship role and not of owners and second in case of business acquisitions or mergers or liquidations directors must not be considered as master of each and every aspect since front end role does not mean they are leading each and every aspect of organization in relation to business failure and check on business growth and other negative aspects that affect business to which they are associated and vice versa.
Chatswood, N., 2016. Australian Corporations Legislation. s.l.:LexisNexis Butterworths.
Goldman, P. a. D., 2001. Some Comparisons Between the Model Business Corporation Act and the Delaware General Corporation Law. Journal of T Business lawyer, 56(2), pp. 737-766.
Grantham, R., 2001. The Proceduralisation of Australian Corporate Law. Journal of Sydney Law Review, pp. 223-245.
Helen Anderson, M. W. ,. I. R. a. P. G., 2012. THE EVOLUTION OF SHAREHOLDER AND CREDITOR PROTECTION IN AUSTRALIA: AN INTERNATIONAL COMPARISON. journal of The International and Compartive Law Quaterly, Volume 61, pp. 121-207.
Helen Bird, G. G. ,. A. G. ,. I. R., 2017. The policy and practice of enforcement of directors’ duties by statutory angencies in Australia:An empirical analysi. Journal of Melbourne Univeristy Law Review , Volume 40, pp. 905-966.
Marcel, K., 2201. The limited significance of norms for corporate governance. Journal of University of Pennsylvania Law Review, 149(6), p. 186901900.
Michael, K., 2004. laws of business : cases , statutes and commentary. s.l.:s.n.
Phillip, M., 2017. Australian Master GSt Guide. 18 ed. s.l.:CCH Australia.
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