Driving adaptation through the boardroom: personal liability for corporate inaction on climate change — YRD
  1. Schedule
  2. Parallel Session 7 - Business as usual? Productivity and prosperity in a changed climate
  3. Driving adaptation through the boardroom: personal liability for corporate inaction on climate change

Driving adaptation through the boardroom: personal liability for corporate inaction on climate change (960)

Sarah Barker 1 2 3
  1. AICD, Melbourne, Australia
  2. University of Melbourne, Melbourne, Australia
  3. Minter Ellison Lawyers, Melbourne, VIC, Australia
This paper extends the emerging theory of corporate liability for climate change damages to consider personal liability exposures of company directors and superannuation trustees. In particular, it examines arguments that may be raised to prosecute governance of (or inaction on) climate change risks and opportunities as a breach of directors' duties to their firm (and of superannuation trustees to fund members). It does so by via a practical application of directors' primary duty of competence - that to exercise due care and diligence - to common governance responses to climate change. It also considers the limited protection afforded by the directors' ‘safe harbour' - the ‘Business Judgment Rule' - to boardroom passivity, inactivity or reactivity on climate change - even where a director's subjective bona fides are not in question. The paper concludes that directors and trustees who do not proactively govern for the commercial risks and opportunities of climate change, now, may be exposed to personal liability for a breach of their duties if corporate or fund value becomes impaired into the future.
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