Director disputes don’t usually start with a bang. They start with silence, small decisions, and unresolved resentment — and then they escalate fast.

The start of a new year is often when unresolved tensions inside companies finally surface. Directors return from the Christmas break with unfinished business, cash-flow pressure, and growing distrust between shareholders. By February or March, many of those issues have escalated into full-scale director and shareholder disputes — often with personal liability consequences that could have been avoided.

At Boss Lawyers, we act in high-stakes director disputes and shareholder disputes across Australia. In our experience, the outcome of these disputes is rarely determined by who is “right” — but by who makes fewer early mistakes.

Here are the five most common mistakes we see directors make in 2026 — and why they often prove fatal to both the company and the individuals involved.

1. Treating Governance as Optional

Many directors assume governance only matters when a company is large or regulated. That assumption is wrong.

In 2026, courts, insolvency practitioners, and regulators expect:

• Proper board decisions
• Accurate financial records
• Clear separation between company and personal interests
• Transparency with shareholders

Where disputes arise, the absence of proper governance is often used as evidence of:

• Breach of directors’ duties
• Oppressive conduct
• Loss of trust justifying removal or court intervention

2. Treating Company Money as Temporary Personal Funds

Few mistakes are as damaging — or as common — as directors helping themselves to company funds with the intention of “sorting it out later”.

Payments described as:

• “temporary loans”
• “director drawings”
• “reimbursements” without invoices
• transfers to related entities

are frequently challenged when relationships deteriorate.

Once insolvency risk enters the picture, these issues can escalate into claims against directors personally — regardless of intent. If you need help with governance or you’re concerned about insolvency exposure, our insolvency and restructuring team can advise early to preserve leverage and reduce exposure.

3. Excluding Minority Shareholders “For Simplicity”

Excluding minority shareholders from information, decision-making, or access to records is one of the fastest ways to trigger an oppression claim.

In 2026, courts are particularly alert to:

• Selective information sharing
• Unequal treatment of shareholders
• Decisions benefiting majority holders at the expense of others

4. Making Side Deals During Financial Stress

When a business is under pressure, directors often attempt to “stabilise” things privately — by restructuring ownership informally, entering side agreements, moving assets between entities, or prioritising certain stakeholders.

The most dangerous assumption is that consent today equals protection tomorrow. When circumstances change, yesterday’s compromise becomes tomorrow’s evidence.

5. Waiting Until a Statutory Demand or Court Document Arrives

By the time formal documents arrive, strategic options are usually limited. In director disputes, timing matters: early advice preserves leverage, delay entrenches positions, and silence can be interpreted as acquiescence.

When to Get Advice

If you are a director or shareholder and any of the following sound familiar, early advice is often the only way to de-escalate effectively:

• Communication with co-directors has deteriorated
• Financial decisions are being questioned
• You feel excluded from information
• You are worried about personal exposure

Need Advice Now?

If you are concerned about a director dispute or shareholder dispute in 2026, seek advice before positions harden and options narrow.

Contact Boss Lawyers for a confidential discussion.

Frequently Asked Questions About Director Disputes

What is a director dispute?

A director dispute is a conflict between directors (or directors and shareholders) about how a company is being run. It commonly involves governance breakdowns, access to financial information, related-party dealings, decision-making control, or allegations of breaches of directors’ duties.

Can a director be personally liable in a company dispute?

Yes. Depending on the facts, directors can face personal liability where conduct involves breaches of directors’ duties, misuse of company funds, insolvent trading risk, misleading conduct, or uncommercial transactions. Early legal advice can often reduce exposure by preserving evidence, correcting governance steps, and preventing avoidable escalation.

What is “shareholder oppression”?

Shareholder oppression (an “oppression claim”) is a remedy available where the affairs of a company are conducted in a way that is unfairly prejudicial to, or unfairly discriminatory against, a shareholder. This can involve exclusion from information, unequal treatment, or decisions that benefit some shareholders at the expense of others.

What should I do if I’ve been denied access to company books?

If you are a director or shareholder who has been denied financials or company records, preserve what you have, avoid making reactive admissions, and seek legal advice on the best strategic path — whether through formal requests, regulatory pathways, or court-based relief.

When should I speak to a lawyer about a director dispute?

As early as possible — ideally before positions harden or formal documents are served. Early advice helps preserve strategic options, protects evidence, and often enables negotiated outcomes without litigation.

This information is general in nature and not legal advice. Specific advice depends on your circumstances.