The Changing Landscape for Directors: Key Risks and Action Items

‘The fundamental duties and expectations of directors have not changed. The focus should always remain on pursuing a culture of compliance, creativity and profitability.’ - ASIC Chair, Joe Longo on 12 March 2025. 

In a recent speech at the Australian Institute of Company Directors Governance Summit, ASIC Chair Joe Longo emphasised that while the challenges facing businesses continue to evolve, the fundamental duties of directors remain unchanged.  

Amid increasing regulatory complexity, technological disruption, and governance failures in key industries, directors must stay vigilant and proactive in fulfilling their responsibilities.   His message serves as a timely reminder that strong governance is essential in today's rapidly shifting corporate landscape. 

We have summarised some helpful takeaways from the Chair’s speech further below. From SME to bigger business, the risks and potential action items for directors listed below are a quick ‘health check’ opportunity for all company directors.

Link to the Chair’s speech here.

Key Risks for Directors

• Regulatory complexity – Increasing and overlapping legal obligations make compliance difficult.  Directors must stay informed to avoid unintentional breaches.

• Failure to know the business – A lack of understanding of operations, risks, and customer impact can lead to governance failures (as seen in the superannuation sector recently).

• Lack of technical expertise on Boards – Boards need members with expertise in technology, cybersecurity, and AI to navigate modern business risks effectively.

• Weak oversight of management – Directors must challenge management and ensure clear and relevant reporting to fulfil their governance duties.

• Failure to adapt to change – While core responsibilities remain the same, directors must proactively address emerging risks such as cyber threats, AI, and climate regulations.

Action Items for Directors

• Engage in regulatory simplification efforts – Stay informed and participate in industry discussions to advocate for clearer, more practical regulations.

• Enhance Board expertise – Consider Board diversity beyond legal and financial backgrounds, incorporating skills in science, technology, and data.

• Improve management reporting – Ensure Board materials are concise and focused on key risks, rather than excessive, unfocused documentation.

• Strengthen governance in high-risk sectors – Financial services and superannuation boards should reinforce oversight of internal systems and claims handling.

• Stay focused on core duties – Directors must consistently uphold their fiduciary responsibilities, irrespective of external pressures.

Need targeted guidance?

At CCK Lawyers, we provide advice on director duties, corporate governance, and regulatory compliance.

For a ‘health check’ on your corporate governance arrangements, please contact Caitlin Ashworth or Ben Wilson at CCK Lawyers on 08 8211 7955.

This article provides general comments only and does not constitute legal advice.  You should always seek specific advice on your particular circumstances.