Directors Duties: Lessons from ASIC v Bekier [2026] FCA 196
The Federal Court’s decision in ASIC v Bekier & Ors [2026] FCA 196 is a significant reminder for directors and officers of the elements of their duty of care under s180(1) of the Corporations Act 2001 (Cth) (Corporations Act). It provides a useful illustration of the roles and responsibilities between management and non-executive directors and the factors that will be considered by the Courts when determining liability.
The proceeding was brought by ASIC against 11 past directors and officers of The Star Entertainment Group Limited (Star).
ASIC alleged each of the directors or officers breached s 180 (1) of the Corporations Act in that they failed to exercise the degree of care and diligence expected of a reasonable director in the circumstances.
The former CFO and Chief Casino Officer admitted breaches of their duties as officers and settled with ASIC prior to trial. Civil penalties and periods of disqualification from managing a public company were imposed against them.
The case proceeded to trial against the CEO/MD and Group General Counsel/Company Secretary, who ASIC alleged had failed to identify, act upon, inform and properly advise the board on clear money‑laundering, legal, and regulatory risks involving junket operators and the improper use of bank cards for gambling purposes.
As against the non-executive directors, the case focussed on the information provided to them and the level of scrutiny and oversight they applied to consider whether the information was adequate and what action needed to be taken.
The Federal Court found that each of the CEO/MD and the Group General Counsel had breached their duties, while in contrast the non-executive directors successfully defended the claims against them.
Management breaches - failing to act on information, escalate and provide the board with a clear picture of the risk
The Court found that the CEO/MD had relevant information that would cause a reasonably competent person in his position to have appreciated reasonably foreseeable legal and regulatory risk, inform the board of that informationand recommend that the company should suspend its business associations with certain operators.
The findings against the General Counsel who was also the Company Secretary centred on involvement in misleading information being provided to the bank, failure to recognise and escalate information about red flags, withholding key relevant information from the board and downplaying the risks.
The Court rejected a delineation between the responsibilities as General Counsel, reporting to the CEO and responsibilities as an officer and Company Secretary as the role as an officer was informed also by her role as the chief legal practitioner of the company. It was not only a matter for the CEO to assess what matters to take to the board, as joint company secretary and chief legal officer, she was accountable to the board and was responsible for raising material legal and compliance issues.
Non-executive directors – it was reasonable, on the evidence, to have relied on information from management
ASIC failed to establish breach of s. 180(1) of the Corporations Act by any of the non-executive directors.
ASIC had argued that management failed to inform the board of the key information but recognises that non-executive directors should have made deeper enquiries and should have taken steps to suspend junket relationships.
As the Court found the board were not told of relevant key information, and that the information they did receive did not put them on notice that there was a risk or that further enquiry was required, the Court was not satisfied that ASIC had established the contraventions against the non-executive directors.
While the non-executive directors escaped liability on the pleaded case, the Court was critical that the records did not seem to show sustained scrutiny of risks or that management was asked difficult questions.
The Court affirmed the following general principles:
“A director, whether executive or non-executive, is required to take reasonable steps to place themselves in a position to guide and monitor the management of the company and is expected to take a diligent and intelligent interest in the information available to them, understand that information, and apply an enquiring mind to their responsibilities.”
The duty under s 180 of the Corporations Act is an objective and contextual test - the standard of care and diligence is objectively measured and the Court considers what an ordinary person, with the knowledge and experience of the director or officer would be expected to have done in the circumstances.
A director’s particular skills and experience are relevant in informing and shaping their duty.
A solicitor and general counsel, who is also an officer, needs to consider their wholistic role and responsibilities, including their professional and ethical obligations as a legal practitioner. The role extends to applying their legal skills to recognise risks and report to the board the matters of which they are aware are relevant to risk.
Non-executive directors need to engage actively. They are entitled to rely on the information provided by management but they must also be pro-active. Their duties “can require a willingness to interrogate, to probe, and, where necessary, to challenge.”
Boards need to ensure that they receive information in a digestible form - directors cannot rely upon an inability to cope with the volume of information they receive. They must analyse and understand the information they receive.
ASIC will now seek financial penalties and disqualification orders against the CEO and General Counsel. The penalty already imposed against the Chief Casino Officer was $180,000 and 18 months disqualification and against the CFO, $60,000 and 9 months disqualification.
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