1. Put your organisation’s logo here Conflicted by interests Prof Michael A Adams

2. Introduction – conflicts of interest Overview of officers’ duties Importance of conflicts laws Practical examples and cases

3. Context of governance Important to understand corporate governance Various definitions Board Charter

4. There is a clear distinction between the concepts: Corporate governance Due diligence Compliance program Adams’ Concepts

5. Officers and Directors Section 9 is the “Dictionary” Officer = director or secretary of the corporation De facto Shadow

6. 6 Corporations Act 2001 Reasonable care Act honestly Misuse information Misuse position Insider trading Insolvent trading Criminal offences Liable for all “Adams officers’ overlap diagram” Harris, Hargovan & Adams, Australian Corporate Law LexisNexis 2010 SBSA v Clark (1996)

7. General Defences There are not many defences 1993 BJR defence s 180(2) USA has “safe harbour rule” Common law

8. Focus on conflicts Fiduciary duty creates legal duties, which at its heart state: – “no conflict rule” – “no profit rule”

9. Conflicts law All officers and directors are fiduciaries Impact of Grand Enterprises v Aurium Resources (2009)

10. Conflicts law Duty to avoid conflicts of interest – Aberdeen Railway Co v Blaikie Bros (1854) Tests for establishing conflicts – Phipps v Boardman (1967) – Bell Group Ltd (in liq) v Westpac (2008)

11. Rule against conflicts Diversion of business opportunities & misappropriation of company property Green v Bestobell Industries Pty Ltd (1982) Some potential protections: – Peso Silver Mines v Cropper (1966) – Streeter v Western Areas Exploration Ltd (2011) Regal Hastings Ltd v Gulliver (1967)

12. Secret profit concept The general rule is against any “secret profits” – Regal Hastings Ltd v Gulliver (1967 HL) – Groeneveld Australia PL v Wouter Nolten (2010)

13. Statutory overlap The equitable fiduciary duty overlaps with statutory provisions in sections 182 &183 – ASIC v Vizard (2005)

14. Disclosure “The best disinfectant is day-light” – full and frank disclosure is critical to avoid conflicts Both equity and section 191 provide protection

15. Conflict defences Full and frank disclosure Apply for court relief under section 1317S Members consent or Ratification

16. Conclusion All company officers owe legal duties Good corporate governance helps Conflicts of interest get resolved by disclosure