The Centro Case Duties and Responsibilities Outlined

Question: Discuss about theCentro Casefor Duties and Responsibilities Outlined. Answer: Introduction In 2011, the Federal Court of Australia ruled on Australian Securities Investments Commission (ASIC) v Healey Ors [2011] FCA 717 (the Centro Case), which has become one of the landmark cases on the duties and responsibilities of Australian company directors with regard to financial statement(Bowlt, 2011). As the facts of the case go, ASIC had instituted civil proceedings in 2009 against directors and officers of the Centro Group citing breach of the statutory duty of care, skill and diligence(McCullough Robertson Lawyers, 2011). According to ASIC, the directors were liable in breach as they had approved financial statements in 2007 which were marred by discrepancies. Additionally, the court had to address the issue of delegation of the aforementioned duty, the duty of directors to take reasonable steps in ensuring financial statements adhere to financial reporting standards as well as the role of non-executive directors in management(AICD, 2011). The issues in question were contrav entions of ss. 180(1), 601FD (1) and 344(1) of the Corporations Act 2001(Cth), hereinafter referred to as the Act 2001. The following report is commissioned to outline the specific duties and responsibilities breached by the Centro Group directors and analyse the Courts decision in view of the Act 2001. An Overview of the Directors Duties and Responsibilities Breached in the Centro Case The Duty of Care, Skill and Diligence The Act 2001, s.180, expects that directors execute their duties with a certain level of care, skill and diligence as would a prudent man under similar circumstances(Latimer, 2012, p. 698). This provision is adopted from the common law standing as illustrated by Romer J in Re City Equitable Fire Insurance Co Ltd [1925] Ch 407, where the standard of care in this duty is pit against the actions of a prudent man in the same situation(Corkery, 1987, p. 133). However, today the test also takes into consideration the nature of the business in question, its size, the constitution of the board of directors and the allocation of duties amongst them (Douglas, 2015). Additionally, the Act 2001, under s 198D, gives directors powers to delegate their duties so long as this is in line with the companys constitution. These duties include the preparation of company accounts, management roles among others. The delegation, however, does not exclude directors from keeping track of company activities, they cannot simply rely on the information of experts or employees but should undertake to examine and clarify details pertaining to their duties(Douglas, 2015). In ASIC v Macdonald (No 11) [2009] NSWSC 287 (the James Hardie case), Gzell J, even where expert advice is sort or duties are delegated, directors have a nondelegable duty to the company and its stakeholders to ensure they take all reasonable steps to provide accurate information failure to which they will be in breach of s180 of the Act 2001(Wan, 2015, p. 79). In the Centro case, the directors breached the duty of care, skill and diligence by failing to identify the discrepancy in the companys financial statements; the actions of the directors, in this case, fell below the stipulated standard of care mentioned above(Paolini, 2014, p. 314). Additionally, the directors reliance on external advisors, that is the PWC auditors, did not suffice as a reason to exempt them from liability as the law expected them to take all necessary action to ensure accuracy despite delegation of duties(Basovo, 2012, p. 84). The failure to identify the inaccuracies, as well as investigate the information provided by advisors, led to a breach of duty by Centro Groups directors. Duty not to Make Misleading Statements The Act 2001, under s.295 (4), tasks directors with the duty of making a declaration on the companys financial position. In making this declaration, directors are required to ensure the information they provide is accurate and a true and fair view of the companys position; this means that they are expected to read and understand said statements and apply their knowledge while reviewing them(AICD, 2011). Additionally, ss 601FD (1) and 344 (1) place the duty on company directors to take proper measure to ensure they, as well as the company, comply with the provisions of the Act 2001. The onus is therefore on directors to stay in the loop and pay attention all while ensuring utmost competency among board members so as to avoid discrepancies(Worthington, 2016, p. 382). Failure to comply with this requirement attracts a civil penalty on offenders who are found liable. According to Owen J in The Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) [2008] WASC 239, the buck of responsibility and liability in the running of a company stops at the board of directors. As such, directors have the duty to fully comprehend their duties and take all necessary measure to comply with them(Schenone, 2011, p. 95). The delegation of duties does not make them dormant; they must create for themselves a working knowledge on the running of the company and apply their mind to any information received from management(Daniels v Anderson, 1995). Directors are at the apex of the corporate structure and although they do not need to be involved with the nitty gritty details of the companys day to day operations, case law is clear that they have a principle role to play in the management of the company and as such should always be aware of the fundamentals of the business(AICD, 2011). In the Centro case, the Directors relied on the external auditors findings that there were no discrepancies in the financial statements. Although these were well renown auditors, the law expects directors to take it upon themselves to ensure their declarations are not misleading and reflect a true and fair view of the institutions financial position. It is clear that the Directors, in this case, did not intend to mislead stakeholders but merely relied on misleading information, however, failure to utilise their knowledge and adequately review the records constituted a breach of duty by Centros directors. An Analysis of the Courts Decision in View of the Corporations Act 2001 In the Centro case decision of June 2011, Justice Middleton found that each of the directors knew of the current interest bearing liabilities and guarantees and in addition knew, or should have known, of the key accounting principles that would inform them of any discrepancies in the statements(AICD, 2011). As such, each director did not take reasonable steps or apply his mind accordingly; additionally, they all failed to question management and other relevant parties on the proposed statements and additionally failed to request declarations as per the provisions of s 295A of the Act 2001.All these are duties expected of them in their capacity as directors and failure to fulfil them constituted a breach of the duty of care skill and diligence owed to Centro Group and a failure to take prudent steps in ensuring financial statements comply with set guidelines(AICD, 2011). They had, therefore, contravened the provisions of ss 180(1), 601FD (3) and 344 of the Act 2001. The following disc ourse will analyse the courts decision, in depth, in view of the Act 2011. According to Justice Middleton, directors must read the financial records and formulate their own view and not simply rely on the information provided by experts and advisors before approval(McCullough Robertson Lawyers, 2011). He believes that reading and comprehending the contents of the statements personally requires that the director to question whether the proposed statements are in line with his personal knowledge of the companys financial position. In his decision, the judge expressed that directors ensure they have a basic understanding of the companys business and its fundamentals. In addition, company directors must remain informed on company activities and monitor their affairs and policies by familiarising themselves with its financial status and conducting routine reviews of its statements(McCullough Robertson Lawyers, 2011). This is in line with the provisions of ss 601FD(1) and 344(1) of the Act 2001, which task directors with ensuring they take undertake measures to a scertain compliance with set guidelines in the Act 2001. Each director should have taken it upon themselves therefore to have an interest in the information provided by the external auditors and apply their skill as directors to discern the accuracy of the information provided. The decision in the Centro Case illuminates the higher standard of care expected of directors as opposed to previous cases. The original test for the standard of care as illustrated in Re City Equitable Fire Insurance was said to be subjective. The test in Centro, guided by s 180 of the Act, encompasses both the subjective and objective test where directors duty of care is pitted against the actions of a prudent man as well as their specific skill; where a director is appointed based on a particular skill the duty of care expected of them is higher(Wan, 2015). As such, the directors were not only expected to act diligently but also to apply their knowledge of the companys business in their review of its statements as they had been appointed with the expectation to nurture this skill. Their failure to apply this knowledge led the court to find them liable for breach of duty based on the aforementioned subjective and objective tests. Additionally, the decision in Centro outlined the extent to which directors can delegate their duties as per section 198D. This issue intertwined with the aforementioned issue of reliance on professional information. In Centro, a committee of directors known as the board audit and risk management committee had been commissioned with the mandate to supervise the preparation of financial statements and reports(AICD, 2011). Justice Middleton held that, although an audit committee played a significant role it could not substitute the role of directors. This decision puts a limit on the extent to which directors can delegate their duties as well as the significance of their managerial role to the company. Justice Middleton believed directors were paramount to the company structure and should not assume their duties through delegation(Schenone, 2011). Critics note, however, that this decision has failed to provide directors with the guidance on how much enquiry they are to make on proposed financial statements(McCullough Robertson Lawyers, 2011). The directors may experience challenges in identifying how far they are to investigate issues that are not clearly identifiable on information provided by management. Additionally, there is the fear that the decision, in this case, could challenge the relationship between management and directors as the high standard of care requires directors to heighten their scrutiny of information brought before them(Norton Rose Fulbright, 2011). This poses a challenge as the decision was unclear on the extent to which it is appropriate to scrutinise information and records presented to directors(McCullough Robertson Lawyers, 2011). Conclusion As illustrated in ASIC v Healey Ors (2011), the Corporations Acts (2001) (Cth) s 180 places a duty on directors to exercise care, skill and diligence in their responsibilities. Additionally, directors are expected to take all necessary measure to ensure the companys financial statements comply with financial reporting standards as per ss 601FD (1) and 344 (1) of the Act. In the above-mentioned case, the company directors failed to identify discrepancies in their annual financial reports after relying on professional experts who found no corrections in them. Their failure to identify these discrepancies constituted a breach of the aforementioned duties as they were expected to apply their knowledge and skill to review the reports prior to approving them. The decision of the Federal Court had brought with it some challenges as it remains unclear as to how much scrutiny directors should exercise on the information availed to them by management and additionally on how liable they are wh ere they fail to identify mistakes that are obvious. With this in mind, it is clear that directors, although given the power to delegate, should remain at the apex of the corporate structure and exercise care, skill and diligence in reviewing financial statements so as to ensure they reflect a true and fair view of the companys financial status. References AICD, 2011. Centro Case Summary: ASIC v Healey Ors [2011] FCA 717. [Online] Available at: https://www.thewaltongroup.com.au/wp-content/pushups/2011/09/ASIC_v_Healey_Centro_Directors_Federal_Court_Judgment__27_June_20111.pdf [Accessed 3 February 2017]. ASIC, 2016. Directors-What are My Duties as A Director?. [Online] Available at: https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-directors/directors-what-are-my-duties-as-a-director/ [Accessed 3 February 2017]. Austin, B., 2012. Directos' Duties: Some Reflections after the James Hardie, Fortescue and Centro Cases. [Online] Available at: https://m.minterellison.com/publications/reflections-after-the-james-hardie-fortescue-cand-centro/ [Accessed 3 February 2017]. Australian Securities and Investments Commission v Healey Ors (2011) FCA. Basovo, V., 2012. Explaining Financial Scandals: Corporate Governance, Structured Finance and the Enlightened Sovereign Control Paradigm. Newcastle: Cambridge Scholars Publishing. Bowlt, H., 2011. Directors' Duties - Raising the Bar?. [Online] Available at: https://www.findlaw.com.au/articles/5136/directors-duties--raising-the-bar.aspx [Accessed 3 February 2017]. Corkery, J. F., 1987. Directors' Duties of Care, Skill and Diligence. In: Directors' Powers and Duties. Melbourne: Longman Cheshire, pp. 131-144. Daniels v Anderson (1995) 16 ACSR . Douglas, J., 2015. Directors' duty of care and diligence. [Online] Available at: https://legalvision.com.au/directors-duty-of-care-and-diligence/ Downie, A., 2011. The Centro Matter: ASIC v Healey [2011] FCA 717 and Breach of Director's Duties. [Online] Available at: https://www.the-civil-lawyer.net/2011/06/centro-matter-asic-v-healey-2011-fca.html [Accessed 3 February 2017]. Golding, G., 2012. Tightening the Screws on Directors: Care, Delegation and Reliance. UNSW Law Journal, 35(1), pp. 266-290. Hall Wilcox, 2015. Legal Obligations of Directors of Australian Companies. [Online] Available at: https://www.hallandwilcox.com.au/legal-obligations-of-directors-of-australian-companies/ [Accessed 3 February 2016]. Latimer, P., 2012. Australian Business Law. Sydney: CCH Australia Ltd. McCullough Robertson Lawyers, 2011. The Centro Decision - Impact on Directors' and Officers' Liability Insurance. Focus, 20 July, pp. 1-2. McCullough Robertson Lawyers, 2011. The Centro Eight- ASIC Turns up the Heat on Company Directors and Executives. Focus, 30 June, pp. 1-2. Norton Rose Fulbright, 2011. The Centro Decision - Directors as the 'Final Filter' of Corporate Financial Accounting. [Online] Available at: https://www.nortonrosefulbright.com/knowledge/publications/52803/the-centro-decision-directors-as-the-final-filter-of-corporate-financial-accounting [Accessed 3 February 2017]. Paolini, A., 2014. Research Handbook on Directors Duties. Cheltenham: Edward Elgar Publishing. Pearse Trust, 2011. ASIC v Healey and Others - A Must Read for Directors. [Online] Available at: https://www.pearse-trust.ie/blog/bid/78452/ASIC-v-Healey-and-Others-A-Must-Read-For-Directors [Accessed 3 February 2017]. Schenone, S., 2011. Duties and Responsibilities of Directors and Company Secretaries in New Zealand. 4th ed. s.l.: CCH. Walmsey, S. Puri, R., 2011. The Centro Decision - ASIC v Healey Ors [2011] FCA 717. [Online] Available at: https://www.jws.com.au/en/legal-updates-archive/item/198-the-centro-decision-asic-v-healey-ors-2011-fca-717 [Accessed 3 February 2017]. Wan, W. Y., 2015. Directors' Defence of Reliance on Professional Advisers under Anglo-Australian Law. Common Law World Review, 44(1), pp. 71-93. Worthington, S., 2016. Sealy and Worthington's Text, Cases and Materials in Company Law. 11th ed. Oxford: OUP.

Moose on the real Essay Example For Students

Moose on the real Essay By the mooses body proportions, antlers shape and size, and its demeanor, the moose is the mighty symbol of the boreal and subartic zones of the entire northern hemisphere. To describe moose country, it is variously dense mixed forest, called taiga or norhtern brush, but the other parts are open forest tundraThe climate differs from zone to zone, and woodland moose prefer only the zones where the average summer tempeture does not much exeed sixty degrees. Wind chill help the moose to stay cool in the costal and the relatively humid zones, as well as in the much drier interior. But the moose has had to adapt both to humid and dry climates, and to dense and open habiats. In North America we refer to this animal as the moose; however, through out continental Erurope, it has been known to them as the elk. The scientific name for it is, Acles acles, also translates in to British English as elk. For North Americans this has been a source of confusion, as the name elk is also given to another member of the deer family. But common names living things differ from region to region, from country to country. The moose towering above with its massive head it surveys the surrounding land.The moose raises its snout with its huge nostrils, to check for any unfamiliar scents of unseen danger. The moose standing at over six feet tall at the shouldersand weighing over one thousand pounds, this animal comands respect. Its neck streches for reach of tender shrubs nearby. Although moose lack teeth in the front of the upper jaw, they have little trouble dealing with woody plnat material that constitues much of their diet. They feed on fresh leaves by browsing and may even pull a shoot sideways in there mouth, freaquently stripping off up to two feet in vegitation with aid of the tonuge. They also browse the tips of twigs, particularly the most recent growth. Regardless of how it is attained, the plant material is thoroughly crushed between twleve sets of broad, flattened teeth at the rear of its mouth, six pairs of molars and six pairs of pemolars Although many different plants are eaten by moose, the type consumed depends on availability, both geographically and seasonally. In general, preferred trees and shrubs include willows, trmbling aspen, redosier dogwood, red maple, stripped maple, white birch, beaked hazelnut, pin cherry and, primarily in winter, balsam fir. Aquatic plants, particulary water sheild, yellow pond lily, and poundweed, constitue a prefered and important part of the mooses diet in the summer. Bibliography:

Young Hunting Essay Example For Students

Young Hunting Essay I finally shot my first bird! I said after I got the bird in my hands. I was very excited. I hunted almost all my life and finally shot something. I hunted and still hunt because I enjoy going out in nature, to relax, and learn new skills like finding the trace of an animal. Going out hunting is exciting because it is one of my favorite hobbies. When I was five years old I began hunting with my grandfather, but it wasnt me that shot with the gun yet. Throughout all the years I have been hunting with him I have learned that nature should be respected. He once said to me in French Respecter la nature cest le plus important que la chasse. We will write a custom essay on Young Hunting specifically for you for only $16.38 $13.9/page Order now It means that respecting nature is more important than hunting. If nobody respects nature and trashes it then there wouldnt be a nice place to hunt because of not having enough trees or there wouldnt be many animals. An example could be when scientists let loose a disease that almost killed all of the rabbits in the place where I hunt, but now it stopped, luckily. People can respect nature by giving food, water, and shelter to the animals because in the winter they would need those things. Another thing my grandfather thought me was to find the traces of animals like rabbits, deer, and boars. He taught me how to find those traces because a hunting dog cannot find all the passages that an animal went through so you need to show him where to go to be on the right trace. My grandfather also thought me not to get fines because they are could get really expensive. They could go as high a 10 thousand French Francs and the hunting license will be taken away automatically. I began using a riffle at the age of thirteen on October 28, which was five days before my 14th birthday. I dont have my hunting license yet but Im going to try to get it when Im 15. My grandfather has a riffle for me to use in the winter vacations. When he let me use the riffle for the first time he gave me a small bullet and I missed a bird, but I didnt move my arm at all. Then he gave me a bullet that was double the size Tunet Magnum #6, I shot with it, and my whole arm flew back because I didnt expect such a huge amount of pressure. The other times I shot with those bullets I only got little shocks on my arm, but not much. I imagined if I would shoot with his double-barrel shotgun. I believe that I would fly all the way back as my grandfather did once and hes a 100 times stronger than I am. I hunt because I want to be in nature, help the environment, and shoot something off course. Shooting something is fun but you have to respect the environment by not killing too much and also not to kill protected animals like I once did. It was my first bird I ever shot, but now I only shoot the ones that are permitted to be shot. When you shoot, have the gun in the right position so you dont fly backwards. One thing to remember is to respect the law of hunting because the fines are very high. Get your hunting license if youre 15 or older because youre going to see that hunting is a fantastic hobby for everybody.

How to Choose the Essay Prompt

How to Choose the Essay PromptWhen writing your essay prompt, you should pick a theme that best represents the topic you are trying to convey in your paper. This will help you avoid 'cracking the code' and writing the same old essay. It will also help make your essay more interesting.After you have the theme in mind, you can now begin to write your essay. Your theme is the basis for all of your ideas. It will help give your essay its direction and, by extension, will also help you craft an interesting piece of writing.The first step in writing your essay prompt is to select the topic. Once you have chosen a topic, you can begin to write your essay. There are three ways to choose a topic. The most traditional is to ask yourself what topic you would like to write about.Perhaps your favorite book or movie was about the topic you chose. Perhaps the topic you have chosen is one of interest to you. Or, perhaps you were asked to choose something that has not been covered by other people on the topic. Whatever the case, you need to have some sort of idea in mind before you start writing.By the same token, the question of 'what topic am I writing about?' will help you create a topic if it is not already taken. You could find a novel or movie that is similar to your topic.There are hundreds of sample essays on the Internet from which you can select. You can go through each essay prompt and choose one to go with. Once you have chosen a topic and one essay prompt to use, then you can begin to take the first steps toward creating your essay.The essay prompt you will use is usually provided in the body of the assignment or the thesis statement. This is usually a list of questions that are related to the topic of the assignment. A common question is, 'What makes your topic worth exploring further?' In addition, there may be other more specific questions that are asked during the course of the assignment.The essay prompt you choose should be very brief and concise. It is not n ecessary to use every single word in the article; this is especially true of the essay prompt that you are writing. However, it is important to use some variation of the phrase 'listen to this.'

How Plants Grow essays

How Plants Grow essays Photosynthesis is the process plants use to make their own food. In order for a plant to grow, it needs several things. It required Water, sunlight and nutrients. The nutrients plants need for a good Health are typically divided into three groups; macronutrients, secondary nutrients, and micronutrients. The chief plant nutrients are, carbon, oxygen, hydrogen, nitrogen, phosphorus, and potassium. The three major nutrients are nitrogen, phosphorus, And potassium. These are the elements that must most often be added to garden soil if plants are to grow healthy. Nitrogen is required in large quantities for the synthesis of proteins, chlorophyll, and enzymes. The more rapidly and actively a plant is growing, the more nitrogen it needs. Good soil is also very important. It has many vitamins and minerals that make a plant grow faster. Soil is good for plants. It makes the leaves greener and the plant better. It contains sand, small rocks, air, water and earthworms. Fertilizer is also a good source for plants. It makes a plant grow faster, be greener and be a lot healthier. Its very similar to soil but not exactly the same. The difference is the thing its made of and that soil has more things added. Regardless of what type of fertilizer you buy, it will come with information about the nutrients it contains. Prominently featured will be the N-P-K ratio, the percentage the product contains by volume of nitrogen (chemical symbol N), phosphorus (P), and potassium (K). A 16-16-16 fertilizer, for example, contains 16% nitrogen, 16% phosphorus, Water is very important to a plant. It has minerals and it makes the plant grow. Water helps keep the plant healthy and ...

Effectiveness of the Leadership Styles at Wal-Mart Coursework

Effectiveness of the Leadership Styles at Wal-Mart - Coursework Example Paternalistic and Democratic are flexible style of leadership and they are being used by Wal-Mart since many years. Wal-Mart takes care of its employees by practicing the paternalistic style of leadership. Wal-Mart tries to supply concern for their employees and in return they gain trust and loyalty of the staff. Through democratic leadership Wal-Mart gives the decision making power to the employees, which promotes the interest of the employees towards the betterment of the organization. However Wal-Mart does not seem keen to practice laissez-faire leadership style, as it wants to restricts the decision making power of the employees. The transactional leadership style is however used by Wal-Mart at times when the find the emotional level of the employees low (5 Different Leadership Styles That All Work!, 2011). The most common and effective leadership style that is being used by Unilever is the transactional style of leadership, which is based on providing materialistic and psychological rewards to the employees on their good performance and also to keep them motivated. This style of leadership is being used through the entire organization. The leaders analyze the cause of the poor performance of the employees and then take corrective actions. The end result of this leadership style have been effective for Unilever, as it helps them reach goal setting, maturity, increase productivity and efficiency of operations. Other leadership styles such as transformational and laissez-faire have not been quite successful at Unilever. However paternalistic and democratic leadership styles have been effective for gaining the trust of the employees and keeping them devoted towards the organization.

Organizational Behavior Annotated Bibliography Example | Topics and Well Written Essays - 1000 words - 1

Organizational Behavior - Annotated Bibliography Example Go-To-People are analytical, aggressive, intuitive, humble, patient, confident, deliberate and decisive. In addition they know how well the organization work, know how to use power when it is needed and think outside the box. 3. Go-To-People can be found anywhere in any department of the company and might be very learned or new graduates as well as someone with just formal education. The organization can find them through interviews by asking tricky questions and see how the employees respond. The organization can also find them by looking for talents within the organization. Or creating challenging projects which will help bring out the characteristics of Go-To-People person. 4. Go-To-People should be nurtured by keeping them challenged, recognizing their efforts and rewarding them thus building their career. Usually they work hard but their efforts go unnoticed and this demoralizes them, hence it is necessary for the organization to recognize the value they bring and reward them appropriately. 1. This article describes the ABC model that can be used by managers to obtain desired behavior and performance from employees by providing a positive feedback. The ideas in this article are the A which is ‘action’, B which is ‘because’, C which is ‘could we?’ and finally the conclusion which determines the outcome of the feedback. 2. â€Å"A† focuses on a specific issue and how the feedback conversation should be carried out. This requires data collection first to determine the issue of concern and the managers should be able to raise the topic without provocation or judgment of the employee being addressed. The use of data and facts is important in this step to ensure that both parties have the same information. A proper â€Å"A† statement will lead to a positive feedback. 3. â€Å"B† looks at why the issue in step A is brought up and the need to address it as well as its impact. This involves accountability and the