How Ken Henry opened up a corporate can of worms
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Elizabeth Proust, who ended her term as chairman of the Australian Institute of Company Directors this week, says a view that a director’s only duties are to shareholders is “outmoded.”
While she says directors have a legal duty to act in the company’s interest, she says most realise that clearly means more than mere profit maximisation.
“I think that most companies, whilst acknowledging that that is the position, also would agree that the future of their company means that they have to take into account much broader interests than that, which is customers, employees, suppliers, the environment and the broader community,” says Proust, a director of Lendlease and chair of the advisory board of Westpac’s Bank of Melbourne.
Given that boards already take these non-shareholder interests into account, she doesn’t see the need for a change in the laws in this area.
Company director Diane Smith-GanderCredit:Wayne Taylor
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