The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, has asked the Corporations and Markets Advisory Committee (CAMAC), to examine what guidance is necessary for directors to fully understand the responsibilities of their roles.

In his request, Bowen said he was particularly interested in what support could be provided to increase the engagement of non-executive directors (NEDs) with their position on the board and bring an independent and broad view to board decision-making. He described moves in the UK to provide guidance to NEDs about their responsibilities on the board, but noted there was no comparable guidance for NEDs in Australia. "While industry representative organisations – for example, AICD and the Investment and Financial Services Association – do provide some guidance to directors on their responsibilities, it is unclear whether this level of guidance is leaving current, and potential, NEDs confident in the expectations and responsibilities that are placed on a NED role," he said.

"In light of the increasing expectations placed on NEDs today as a result of decisions in cases such as Australian Securities and Investments Commission v Macdonald No.11, all NEDs, not only those of Australia’s publicly listed companies, may benefit from clarification around the expectations of the NED role."

Bowen requested that CAMAC:

• Examine the guidance or codes of conduct that are available overseas for corporate directors;
• Examine whether there is sufficient guidance provided to executive directors and NEDs in Australia to ensure that they have a clear understanding of their roles and responsibilities; and
• Advise whether the performance of directors would be enhanced by the introduction of guidance for directors – for example through a code of conduct or best practice guidance – by a relevant regulator, and if so, what form that guidance should take.