The Enforcement of Directors' Duties and Disclosure Laws in Australia
This thesis takes a dual modality approach to examining the functionality and empirical incidence of the private and public enforcement of directors’ duty and mandatory disclosure laws in Australia. First, in order to provide a comprehensive picture of the enforcement landscape, this thesis presents two new hand-collected datasets of cases involving directors’ duty and disclosure law breaches for further examination. Second, this thesis explores a number of the potential reasons that the observed enforcement patterns may exist in the Australian context, positing the shareholder dispersion theory, the substitution theory, and the publicity theory. To support this assessment, this thesis undertakes a new analysis of shareholder dispersion and institutional investor holdings as well as an assessment of public regulator resources. Third, this thesis examines whether the observed enforcement patterns are effective, by reference to an original set of evaluatory criteria, which addresses whether the actions compensate, deter, and signal. The constructed datasets enable these criteria to be empirically examined, thus providing an innovative assessment of the enforcement landscape. Overall, the empirical analysis reinforces the signalling function of enforcement, and shows that there is a reasonable degree of deterrence achieved where directors are targeted. However, the compensation rationale is not met in the disclosure law actions, nor is it met in the publicly listed company subset of the directors’ duty dataset, resulting in a moderately effective enforcement framework with scope for improvement across both modalities of enforcement.