Melbourne Law School - Research Publications

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Author: Langford, Rosemary × End date: 2019 × Start date: 2017 × Type: Journal Article ×

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    The Proper Purpose Rule as a Constraint on Directors' Autonomy - Eclairs Group Limited v JKX Oil & Gas plc
    Langford, RT ; Ramsay, IM (WILEY, 2017-01)
    The recent case of Eclairs Group Limited v JKX Oil & Gas plc highlights the pressures faced by company directors in change of control situations, in which they may be tempted to take action to prevent or discourage such change. The Supreme Court decision provides important clarity on the scope of the proper purpose rule in these (and other) situations. We explore the implications of different judicial interpretations of the proper purpose rule for the autonomy of directors in their decision‐making. We do this by focusing on the scope of the proper purpose rule, whether a subjective or objective test is employed in the application of the rule and the test for causation where a director is motivated by mixed purposes.
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    Social Licence to Operate and Directors' Duties: Is There a Need for Change?
    Langford, R (Thomson Reuters, 2019)
    Directors’ duties have received renewed focus in the aftermath of the Banking Royal Commission, with questions arising as to whether directors need more leeway – or increased obligations – to take stakeholder interests into account. At the same time, the concept of social licence to operate was omitted from the final fourth edition of the ASX Corporate Governance Principles and Recommendations, issued in February 2019. In the United Kingdom a new Corporate Governance Code and a new Guidance on Board Effectiveness were enacted in July 2018 with emphasis on the long-term sustainability of companies. Questions arise as to exactly what the contested concept of social licence to operate entails, whether embracing social licence to operate would necessitate reform of directors’ duties and whether any lessons can be learnt from the UK experience in these respects. This article addresses these questions, arguing that the UK model of increased reporting and adoption of a Guidance on Board Effectiveness may provide solutions for Australia.