Directors’ Duties in Australia: Lessons from ASIC v Bekier [2026] FCA 196

Why this case matters

If you search for terms such as directors duties Australia, section 180 Corporations Act,
non executive directors duties, directors liability Australia, or
board oversight duties, this is exactly the type of decision that should appear.

The judgment arose from civil penalty proceedings brought by ASIC against members of the executive team and board of
Star Entertainment in relation to alleged contraventions during dealings with junkets and the group’s principal banker.
The Court considered whether directors and officers had failed to comply with s 180(1) of the Corporations Act 2001 (Cth),
and addressed the responsibilities of directors, non-executive directors, a company secretary, and a chief legal and risk officer.

For a firm like Boss Lawyers, which positions itself in
shareholder disputes,
director disputes and commercial litigation,
and broader commercial dispute work, this case is directly relevant to the kinds of governance failures that often lead to urgent advice,
injunctions, oppression proceedings, boardroom deadlock, and claims for breach of duty.

Background to the Star litigation

The case concerns Star’s dealings with junkets, especially Suncity, and separate issues involving the use of China UnionPay cards
through communications involving Star’s principal banker. The judgment records ASIC’s case that the proceedings concerned two broad areas:

1. Star’s relationship with junkets and alleged failures to respond to suspicious conduct and escalating regulatory risk; and
2. issues arising from the use of China UnionPay cards and allegedly misleading communications in that context.

The judgment also records ASIC’s allegation that executives failed to ensure the board was given a proper overview of the risks,
while non-executive directors were said to have failed to recognise gaps in the information being provided and to make further enquiries.

That tension is one of the most interesting aspects of the case: management was said to have failed to apprise the board sufficiently,
while directors were said to have failed to appreciate that the information they had was inadequate.

What section 180 of the Corporations Act requires

Section 180(1) requires a director or officer to exercise their powers and discharge their duties with the degree of care and diligence
that a reasonable person would exercise if they:

• were a director or officer of the corporation in its circumstances; and
• occupied the office held by, and had the same responsibilities within the corporation as, the actual director or officer.

That statutory standard is objective, but it is not abstract. As the judgment shows, the assessment is contextual. It turns on the
corporation’s business, its regulatory environment, the role of the individual, the information available at the time, and the foreseeable risks.

If your business is facing an internal governance breakdown, allegations of misuse of power, or a dispute between directors and shareholders,
our pages on
director disputes in Australia,
misuse of power by directors, and
shareholder disputes
deal with related issues that often arise before litigation.

Key legal principles from the judgment

1. Boards must control the information they receive

One of the most important statements in the case is the Court’s observation that boards must control the information they receive.
Directors must take reasonable steps to place themselves in a position to guide and monitor management, and cannot rely on an inability
to cope with the volume of information they receive. In other words, directors must exercise control over the flow and quality of information.

2. The distinction between executive and non-executive directors is contextual

The judgment recognises that there is a distinction between executive and non-executive directors, but the relevance of that distinction
must be assessed contextually. Non-executives are not passive ornaments. Their responsibilities are shaped by the company’s circumstances,
the committee roles they occupy, and the risks confronting the business.

3. Foreseeable risk must be weighed against potential benefit

The Court considered reasonable foreseeability under s 180(1) by reference to balancing the potential benefits of a course of action
against the reasonably foreseeable risks of that course of action. This is a critical point for boards making decisions in fast-moving,
regulated, or politically sensitive environments.

4. Hindsight is not the test

The judgment expressly recognises the danger of hindsight bias. Directors’ decisions are made in real time, often with incomplete information.
The Court emphasised that past actions must be judged by reference to the snapshot of knowledge and perspective then available.

5. Technology may assist, but it cannot replace judgment

In a notable passage, the judgment addresses the role of artificial intelligence in corporate governance, stating that technology may assist
comprehension, but cannot displace human judgment. That observation is likely to become increasingly important as boards adopt AI tools for
summarising papers, compliance reporting, and risk management.

The business judgment rule

The Court also considered s 180(2), being the business judgment rule. The judgment examines whether the rule operates as a rebuttable
presumption or as a defence. In practical terms, the case reinforces that directors cannot simply invoke the phrase
business judgment rule as a shield after the fact. The statutory conditions still matter.

Boards that want the protection of s 180(2) need to ensure that decisions are:

• properly identified as business judgments,
• made in good faith for a proper purpose,
• free from material personal interest, and
• based on an appropriately informed foundation.

If a dispute later arises over whether directors acted prudently, the quality of the board process will often matter as much as the substance
of the ultimate decision.

Can non-executive directors rely on management?

Up to a point, yes. But only up to a point.

The judgment considers reliance under s 189 of the Corporations Act and, more broadly, the degree to which directors may rely
on management and advisers. The lesson is not that reliance is forbidden. The lesson is that reliance must be reasonable.

Non-executive directors cannot:

• switch off when risk indicators emerge,
• ignore manifest gaps in board materials,
• treat committee membership as merely ceremonial, or
• assume that management will always elevate every issue requiring board intervention.

That is why businesses facing governance conflict should seek advice early. Many board disputes that later become oppression claims,
deadlock applications, or breach of duty proceedings start with poor reporting lines, incomplete board papers, and unmanaged friction
between executive management and non-executive directors.

For related reading, see Boss Lawyers’ articles on
boardroom deadlock,
director and shareholder dispute red flags, and
director duties and avoiding disputes.

General counsel, company secretaries, and chief legal and risk officers

Another important feature of the judgment is its consideration of whether the responsibilities of a company secretary, group general counsel,
and chief legal and risk officer are divisible, and how the scope of an officer’s responsibilities within a corporation is to be determined.

This is significant because many large businesses rely heavily on in-house lawyers and governance executives to identify, escalate, and frame
legal and compliance risk. The case is a reminder that:

• titles do not eliminate responsibility,
• formal reporting lines are not the end of the analysis, and
• the Court will look at actual functions and responsibilities, not just job descriptions.

For private companies and founder-led businesses, similar issues arise where a director, company secretary, CFO, or external adviser becomes
aware of serious risk but fails to ensure it is properly documented or escalated.

Practical lessons for directors, boards, and business owners

1. Good governance is a process, not a slogan

If your board papers are too thin, too late, or too curated by management, the board is already at risk.

2. Directors must ask better questions

A reasonable director is expected to identify obvious gaps, challenge assumptions, and seek further information when something does not make sense.

3. Highly regulated businesses require heightened vigilance

Companies operating in sectors involving licensing, financial controls, AML/CTF exposure, or regulator scrutiny should assume that governance
failures will later be examined with forensic intensity.

4. Internal warnings must be escalated properly

When internal reports, legal memoranda, compliance reviews, or adverse media indicate a serious problem, the question is not merely whether
someone in the organisation knew. The real question is whether the right people knew, in time, with enough detail, to act.

5. Board minutes and paper trails matter

In any later dispute, the contemporaneous documents will usually carry more weight than reconstructed memory. Governance discipline is not just
a regulatory issue. It is also a litigation readiness issue.

When to seek legal advice

A governance issue becomes a legal dispute faster than many boards expect. If your company is dealing with:

• alleged breach of directors’ duties,
• oppressive conduct,
• board deadlock,
• shareholder exclusion,
• misappropriation allegations,
• urgent injunction issues, or
• regulator-facing governance concerns,

early advice can materially improve your position.

Boss Lawyers acts in complex
director disputes and commercial litigation matters
and advises on high-stakes disputes involving directors, shareholders, officers, and business owners. You can also read more on
legal options when business relationships break down,
common causes of director disputes and legal remedies, and
why corporate governance matters.

Conclusion

ASIC v Bekier is not just a Star Casino case. It is a contemporary statement of Australian governance expectations.
The judgment reinforces that modern directors and officers must do more than attend meetings and absorb curated summaries.
They must place themselves in a position to guide and monitor management, control the information they receive, and respond rationally
to foreseeable risk.

For directors, founders, investors, and advisers, the broader message is clear: passive governance is dangerous, and litigation often begins
where disciplined oversight ends.

If you need advice about a director dispute, shareholder claim, boardroom deadlock, governance breakdown, or suspected breach of duty,
contact Boss Lawyers.

Frequently asked questions

What is ASIC v Bekier about?

It is a Federal Court civil penalty proceeding brought by ASIC concerning alleged contraventions by members of the executive team and board
of Star Entertainment arising from dealings with junkets and the group’s principal banker.

What is section 180 of the Corporations Act?

Section 180(1) is the statutory duty of care and diligence imposed on directors and officers. It asks what a reasonable person would have done
in the same position and with the same responsibilities.

Can non-executive directors be liable for governance failures?

Yes. The significance of the executive versus non-executive distinction is contextual. Non-executive directors must still engage actively,
identify gaps in information, and exercise genuine oversight.

Does AI reduce directors’ responsibilities?

No. The judgment observes that technology may help comprehension, but it cannot replace human judgment in governance decisions.

When should a company seek legal advice about a board dispute?

As early as possible. Delay usually worsens evidentiary, commercial, and strategic risk.