Directors face jail

COMPANY directors are facing increased jail terms for everyday business decisions under new federal laws that backtrack on promised national reforms originally meant to ease burdens on board members.

The new federal bill doubles the jail term for company directors who miss the deadline to lodge their annual report with the corporate regulator, taking the penalty to one year in custody. The bill also imposes one year in jail for directors who do not tell the regulator about the appointment of directors or company secretaries within 21 days of the decision, four times the previous sentence for the same fault.

Don’t you just love the ALP’s attitude to business. The union backed government will do all it can to make it difficult to do business. I’m a Director and Company Secretary of a registered charity that provides swags for the homeless. The charity is not-for-profit and I certainly don’t get any remuneration, but if I fail in my duties by, for example, not notifying ASIC within 21 days of a board appointment I could go to jail for a year. Whereas we as a board are doing a lot of work to ensure our governance is up to scratch and I work hard at following the letter of the law, mistakes do happen. Frightening. I can understand the ALP and unions legislating to make business difficult but do they really intend to frighten potential directors away from volunteering to sit on a board of a charity less they end up in jail. Rudd’s original intention of legislating to ease burdens on board members has just resulted in another ALP anti-business solution.