There has been corruption, negligence and insider trading as long as companies and their boards have existed.

I think there needs to be more accountability for Public companies and their boards, as their stability affects all people of the country, taxpayers, employers, employees, retirees etc...

We are all affected when one of these company suffers from bad management.

Yes Col, fewer investors, and far fewer speculative bubbles as the only "partners" would be involved and understand "their" business.

Similarly, if my liability could be "limited" I might try any number of irresponsible acts.

Company directors *are* liable. If the shareholders were, then the shareholders interests would include reigning in directors. As you say, plenty of directors are prosecuted, so there is clearly insufficient feedback from merely punishing directors.

So, who profited?

I'm not seeing a problem with my suggestion for anybody who is not excessively greedy or excessively irresponsible.

Rusty

RC "I'm not seeing a problem with my suggestion for anybody who is not excessively greedy or excessively irresponsible."

And there in lies one of the problems....

there is no definition, in law or in nature of "excessively greedy" or "excessively irresponsible"

and "subjective judgements" are not a good basis for any law.

Please note the rights of the share holders of a company are very limited, relative to the rights of Directors of the same company, in that they have the right to buy, hold and dispose of their shares and to generally, vote to approve the proposals of directors, who they elected as they saw as the best for the job -

but shareholders have only limited rights in certain areas of corporate governance to propose alternatives to the proposals of the directors.

And like I said, "unlimited" forms of "companies" are available already, typically as partnerships to say nothing of sole traders.

However, "limited liability" is just another form of incorporation, better suited to larger "joint stock" ventures, where the capital needs generally exceed the capacity of a few "friends".

I would also point out that the rules of the stock exchange are, generally, even more restrictive to new companies being listed and better policed for all companies, than the rules defined under various companies legislation.

But whilst all that will never stop all the rogues, it does attempt to minimise them, whilst still providing a highly valued service for "investors" to participate with "entreprenuers" through the public issue and trade in limited liability shares.

I further recall the law was changed, about 16 years ago, to allow single director / shareholder companies.

This was to limit the liability of "wives", who had been, previous to the change, invariably been the second director of many small companies. It was done to protect them in suitations of divorce etc..

Shareholders can also have their shares compulsorily acquired ie. without consent where 90% of other shareholders agree to sell even if it means a loss to the shareholder.

Mum and dad shareholders have very little rights.

Col,

would you have preferred, "unreasonable" rather than "excessive"? *that* term enjoys extensive use in law, for all that it is often a talking-point. "unconscionable" is another that comes to mind.

if shareholders benefit "unreasonably", from "unconscionable" acts of boards they were happy to not oppose in anticipation of such profit, should their liability be "limited"

I think not.

Fortunately, as you point out, penalties for officers and directors are considerable and the vast majority of companies are not operated unconscionably. As you further emphasise, investment would dwindle.

However, having batted it about with a couple of mates in business, I see your point.

Rusty

It is of course very clever of Mr Gupta to use Online Opinion to advertise his "recently launched business".

I assume this is he:

"Puneet Gupta, Director, Business Development at BoardofDirectors.com.au"

But just a little deceitful, not to declare his interest upfront.

Sadly, the "anything goes, if I can get away with it" attitude is one of the characteristics that pervades Australian business. Almost a requirement, one suspects, in some businesses.

Which makes the irony even sharper, when using these tactics to solicit for Board members by opening with the line "given the issues with the News Corp governance, and more locally, Centro".

Declaring your interest is not difficult, Mr Gupta. Nor need it detract from your message, if the message is appropriate. By not declaring your interest, on the other hand, you paint your business in entirely the wrong ethical colours.

Or maybe they're the ones you believe that directors need in order to get ahead? That would be a sobering message indeed.