Directors’ Duties in Practice
6 March 2026
Mads Kjaer, Managing Director
The Federal Court’s decision in Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196, marks a significant development in Australian jurisprudence on directors’ and officers’ duties, particularly in the context of complex operational and regulatory risk. The case arose from ASIC’s civil penalty proceedings against former executives and directors of The Star Entertainment Group (‘Star’), following extensive scrutiny of the company’s governance failures during the period in which serious money laundering and regulatory compliance issues emerged. While ASIC pursued a broad case against multiple directors and executives, the Court’s findings drew a clear and instructive distinction between executive responsibility and non‑executive oversight.
Justice Lee found that former Chief Executive Officer, Matthias Bekier breached his duties under section 180 of the Corporations Act 2001 (Cth), failing to exercise the degree of care and diligence expected of a person in his position. By contrast, ASIC did not succeed in establishing liability against the non‑executive directors. This outcome is particularly important for governance practitioners, as it clarifies that liability will not be imposed simply because serious misconduct or regulatory failures occurred within an organisation. Instead, the Court focused on who held operational responsibility for identifying, managing and escalating risk, and whether those responsibilities were discharged appropriately.
For Havn Consultancy clients, the decision underscores a critical governance reality, that executive roles carry a fundamentally different risk profile to non‑executive directorships, particularly in highly regulated and operationally complex businesses. Justice Lee’s reasoning highlights that executives cannot shield themselves behind board structures or collective decision‑making where they are responsible for the day‑to‑day management of material risks. In this case, the Court found that foreseeable risks relating to junket operators, credit exposure, and regulatory compliance were not adequately addressed or escalated, despite their seriousness and persistence.
At the same time, the judgment provides important guidance on the limits of non‑executive director liability. Non‑executive directors are entitled to rely on information provided by management, but that reliance is not unlimited. The Court’s reasoning reinforces that where critical risk information is not properly escalated, accountability may fall squarely on those with operational control rather than the board as a whole. This distinction is often misunderstood in practice and is a recurring source of tension in governance design, particularly in organisations where reporting lines and risk ownership are unclear.
From a risk management perspective, this case illustrates how governance failures rarely arise from a single poor decision. Instead, they emerge from systemic weaknesses in how risk is identified, assessed, communicated, and acted upon over time. In this case, serious compliance issues were known, evolving and foreseeable, yet they were not addressed with the urgency or transparency required. For boards and executives, this reinforces the importance of robust escalation frameworks and clear accountabilities for regulatory and financial crime risk.
The decision also has broader implications for how organisations think about their governance architecture. Policies, committees and reporting structures are only effective if they operate in practice and are supported by a culture that encourages candour and challenge. Justice Lee’s observations about the ‘dysfunctional’ culture within senior management at Star are a reminder that governance is as much about behaviour and incentives as it is about formal compliance mechanisms. Where management culture discourages escalation or downplays regulatory risk, the legal exposure for executives increases significantly.
For Havn Consultancy clients, the case is a timely reminder to reassess where operational risk truly sits within the organisation and whether governance frameworks reflect that reality. Boards should be confident that they are receiving timely, accurate, and complete information about material risks, while executives must understand that responsibility for managing and escalating those risks cannot be delegated away. Clear role definition, disciplined reporting, and regular testing of risk controls are essential to avoiding the type of governance failure examined by the Court.
At Havn Consultancy, we see this decision as reinforcing a broader regulatory trend, that enforcement action is increasingly targeted at individual accountability, particularly for senior executives with direct control over risk‑laden operations. Organisations that invest in strengthening executive accountability, risk ownership, and escalation pathways are far better positioned to withstand regulatory scrutiny. This case will likely become a reference point in future civil penalty proceedings and should prompt boards and executives alike to reflect on whether their governance arrangements genuinely support effective risk management, rather than simply appearing to do so on paper.
This article is general information only and does not constitute legal advice.