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Tomasic, Roman --- "The Challenge of Corporate Law Enforcement: Future Directions for Corporations Law in Australia" [2006] UWSLawRw 1; (2006) 10(1) University of Western Sydney Law Review 1


Roman Tomasic[∗]


Much progress has been achieved in modernising Australian corporations law statutes over the last half century.[1] However, despite some impressive advances, much less has been achieved in enforcing or implementing corporations laws in Australia. In seeking to speculate about the future it is always desirable to look at the past as the seeds of future growth can often be found in past practices; this is to some extent an expression of the so-called path dependency argument that is illustrated by the characteristic features of every country’s legal systems.[2]

Whilst Australia clearly does have its distinctive corporate law features that distinguish its governance arrangements from the usual Anglo-American models[3], it also has a large number of common features that it shares with other developed countries. Probably the most important of these are the background business culture, ethical values and legal institutions against which corporate laws operate; these are the most important ingredients in ensuring the effectiveness and enforcement of such laws. Australian corporations laws contain most of the elements that contemporary legal theorists have seen as being desirable in a ‘modern’ body of company law.[4] However, with increasing globalisation and the contraction of the role of the state in economic markets, the nature of modernity and the role of law have changed significantly since the enactment of the first broadly based company laws of the mid-nineteenth century.[5]

As a result, modern company laws have, and will continue, to be modified and adjusted to suit changing economic and legal circumstances. In Australia, over the last half century, this modernisation of company law has moved from the development of more uniform and more consistent bodies of legislation across the Australian States, followed by the passage of a comprehensive national Corporations Act in 2001.[6] We have also seen moves to simplify and streamline the content of this body of company law as well as to reduce the economic burden of such laws upon small to medium sized businesses.[7]

More recently, we have seen efforts to simplify the administration of Australian company law and to reduce the use of litigation as a means of enforcing this body of law, especially in areas such as takeovers[8] and voluntary administration of insolvent companies[9]. In this regard, it should be noted that whilst corporate regulation in Australia has seen the corporate regulator, the Australian Securities and Investments Commission (ASIC), taking action ‘to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it’, this is but one of six broad functional areas that the Commission needs to balance (with its limited resources) with other broader functions; these other areas relate to:

(i) Facilitating and improving the performance of the financial system;

(ii) Promoting the confident and informed participation of investors and consumers in this system;

(iii) Administering its laws effectively and efficiently;

(iv) Collecting and storing relevant information about companies; and

(v) Ensuring that information about companies is available to the public as soon as is practicable.[10]

In Australia we have also seen efforts to enhance the extent to which the Corporations Law is self-enforcing through the use of such mechanisms as the use of default rules in company constitutions[11], the introduction of statutory derivative action procedures,[12] and the imposition of liabilities on directors for the debts of their company in the event of insolvent trading,[13] and liabilities imposed on directors and others for misstatements in capital raising documents.[14] Duties placed on auditors have also been enhanced following a number of major corporate collapses in recent years.[15]

We have also seen an increase in the range and amount of financial and custodial punishments that may be imposed for breaches of the Corporations Act[16] and the introduction of new measures, such as infringement notices[17] and the civil penalty order procedure.[18] However, it has not been unusual for criminal matters arising under the Corporations Act to be settled by resort to civil means and the use of the criminal law being limited as civil penalty provisions (which is are hybrid measures that involve both civil and criminal elements).

The use of civil and administrative remedies rather than criminal penalties in regard to corporate law breaches has increasingly gained favour in Australia.[19] At the same time, we have also seen efforts to reduce the burdens on those affected by new legal duties and procedures by the enactment of a large number of defences and exceptions aimed at protecting directors and officers, such as the passage of business judgement laws aiming to provide a ‘safe harbour’ to officers who are deemed to have behaved reasonably when making a decision.[20]

However, in an environment of limited regulatory resources to monitor corporate misconduct and to bring legal action against those who breach the law, the problem of implementing and enforcing the Australian Corporations Act has become increasingly important.[21] It is one thing to have an elegant and comprehensive company law statute or body of formal law, it is another thing to ensure that this law is effectively enforced. This is a theme that is crucial in developed countries such as Australia, as well as in many developing Asian countries, such as China. Since the collapse of Enron, it has also been increasingly seen as a matter of concern in the United States.[22]

This is especially so after the enactment of legislative provisions such as ss 302 and 404 of the Sarbanes-Oxley Act (and associated SEC rules), which require the establishment of robust internal financial control systems within companies and call upon corporate executive officers to certify their effectiveness.[23]

At the same time, there has been a growth of interest in the protection of a wider range of stakeholders than shareholders[24], as well as an attempt to fashion new notions of corporate social responsibility. To some extent, these movements have been too much for government regulatory agencies to deal with and, as a result, others (such as companies themselves, their directors, auditors, lawyers, creditors and shareholders) are being encouraged to play a greater role in enforcing and implementing the provisions and values of our corporation laws. It is therefore important to move beyond the current focus on achieving more effective external regulation of corporations by putting in place internal compliance mechanisms for more effective corporate law enforcement within companies themselves. In this paper I will seek to explore some aspects of this theme in regard to Australia and its future implications for the effectiveness of Australian corporations laws enforcement.[25]

Challenges in enforcing Australian corporations law

Major corporate collapses have been a widespread feature of the corporate world as the recent collapses of Enron[26] and WorldCom[27]

in the United States and of Parmalat[28]

in Europe well demonstrate. The history of corporate collapse and related misconduct in Australia is also extensive.[29] Such collapses have often led to the establishment of commissions of inquiry that have usually recommended reforms to improve enforcement of corporate and securities laws in Australia. The most recent of these major inquiries in Australia has been the HIH Royal Commission that reported in 2003 on Australia’s largest corporate collapse.[30]

Reports such as these have urged that attention be given to underlying causes of corporate collapse, although government has rarely effectively tackled these causes. In 1990, the Australian corporate regulator prepared a ‘hit list’ of 16 high profile corporate cases that were seen as ‘priority’ areas of concern based on the corporate collapses of the 1980s.[31] Unfortunately, successful criminal cases could not be brought against all of these matters.[32] This ultimately highlighted the need for more nimble enforcement strategies as effective criminal prosecutions proved to be problematic.

It is useful to seek to examine whether academic theory regarding corporate social control might be useful in this regard. For example, whilst not specifically concerned with technical corporations law breaches, Professor John Braithwaite and his various students and colleagues have written about corporate crime and strategic corporate regulation.[33] This work has been influential in affecting the way in which some business regulatory agencies, such as the Australian Trade Practices Commission and the Australian Taxation office, have used their limited resources to deal more effectively with the problems of corporate law compliance.

In this regard, this pyramid of regulatory enforcement has been an influential model that has been used by a number of business regulators. This pyramid has at its base the use of less punitive, less costly and less intrusive compliance methods (such as voluntary compliance and persuasion); as one rises to the apex of the pyramid, these compliance methods become increasingly punitive, intrusive and costly. Under this approach, one ascends the pyramid through more complex and severe measures such as warning letters to civil penalties, leading to more costly and stigmatising measures such as the use of criminal penalties and to licence suspension and eventually to licence revocation and imprisonment.[34]

Under this punishment-based regulatory approach, the nature of sanctions progressively escalates with the criminal sanction of incarceration being used as a last resort. This regulatory model has been described as ‘strategic regulation theory’.[35] This theory had been referred to favourably in two Australian parliamentary reports that have sought to lay the foundations for new corporations law provisions regarding misconduct by directors, with a graduated range of sanctions being preferred as means of dealing with corporate law offences.[36]

This regulatory pyramid may also be seen in terms of underlying regulatory assumptions which, at the base of the pyramid, assume a virtuous actor for whom restorative justice measures and persuasion may be appropriate; however where such restorative measures are not effective (in the middle ranges of the pyramid) it is said to be more appropriate to resort to deterrent measures when dealing with rational actors who calculate risks; finally, at the apex of the pyramid, incarceration is the only measure that remains, which would applied where all other methods have failed. This approach of escalating responses and sanctions may be compared with the new focus on risk assessment that has increasingly guided the approach to enforcement adopted by regulatory agencies.[37]

However, Australian courts have in recent times wrestled with the implications of strategic regulatory theory as reflected in this regulatory pyramid; this has arisen in the context of the legislature seeking to create enforcement techniques that assume a clear distinction between civil and criminal actions. This has arisen in the context of cases concerning the civil penalty regime that is now found in Part 9.4B of the Australian Corporations Act. Before the 2004 decision of the High Court of Australia in Rich & Anor v ASIC [38] the Commission had argued that proceedings such as those involving the disqualification of directors were ‘protective’ of the community and not ‘punitive’ in nature. However, the High Court rejected this distinction and noted that, like the civil-criminal distinction, the distinction between punitive and protective proceedings was ‘elusive’ and unstable. In the case of the effects of a disqualification order upon a director, these measures were seen to be both protective and punitive.

As one observer has said of the High Court’s approach in this case: ‘by imposing heightened procedural protections in relation to civil penalties and treating civil penalty procedures more like criminal proceedings, the case really undermines the ability of the civil penalty regime in Part 9.4B to provide an effective method of corporate regulation.’[39] This confirms the view expressed some years earlier by Professor John Farrar, that the effect of these corporate law reforms aimed at making corporate law less penal in nature, had been ‘more cosmetic and rhetorical than real’.[40] This outcome is hardly surprising given the difficulties that appeal courts have had in grafting socio-legal theory onto traditional evidentiary rules that seek to protect the interests of litigants.

If the reports of some major government commissioned inquiries into corporate fraud and corporate collapse in Australia are to be relied upon, the effective implementation and enforcement of corporate law rules remains a significant issue.[41] Often the discovery of such corporate breaches is almost accidental, relying on the press or on citizen complaints to bring them to the attention of government regulators.[42] Whilst the annual reports of ASIC provide some useful information on the Commission’s enforcement efforts, official reports such as these are not produced for research purposes and need to be read with caution.[43] In 2005 there were 1,427,573 companies registered in Australia. A further 121,463 new companies were registered in 2004-2005.

As Table 1 shows, in 2004-05 a total of 10,752 public complaints about corporate misconduct were dealt with by ASIC in that year; similarly, liquidator’s submitted 6,878 reports to ASIC in regard to suspected conduct. In these statutory reports breaches of the law were reported in 5,321 cases.[44] However, only 27 corporate criminals were jailed in this year and only 121 civil orders were made against companies or their officers in that year. A major role of the Commission is the granting of exemptions or waivers from compliance with the Corporations Act, with 2993 such orders being given in this year. The 2004-2005 ASIC Annual Report compares the effectiveness of its enforcement efforts over the last three years; Table 1 sets out some of this information.

Table 1: Measures of ASIC effectiveness in meeting its statutory aims

Effectiveness Aims

(a) Aim: Upholding the law uniformly, effectively and quickly

Criminals jailed each year
Civil orders against people or companies each year
People removed from directing companies
People banned from financial services
Auditors and liquidators disciplined for misconduct
Percent of litigation successful
Additional disclosure achieved through ASIC intervention
(b) Aim: Promoting confident and informed consumers

$ million in company fundraisings where ASIC required additional disclosure each year
Public complaints about misconduct finalised each year
10, 752
Callers assisted through ASIC infoline each year
Liquidator’s Reports of suspected conduct received by ASIC

(c) Enforcement Staffing and operating expenses
Total Enforcement Staff (full time equivalent) each year[*]

Annual Change

Operating expenses rose to pay for extra workload each year

Annual Change

(d) Facilitating Commerce

Approval of waivers of, or modifications of, the corporations law
1400 plus

* ASIC staff in 2004-05 were allocated to different functions as follows: 420 to enforcement, 100 to consumer protection, 157 to compliance, 163 to regulation, 535 to operations and 122 to finance.

Source: Adapted from ASIC Annual Report 2004-05 and earlier ASIC annual reports.

Australian corporate law enforcement measures

Despite the occasional successful high profile prosecution, there have long been concerns in Australia about the general effectiveness of corporate criminal law enforcement measures.[45] This is in part due to the difficulties of satisfying the high evidentiary burdens of proof in such court cases (except in the rare event that an accused pleads guilty to a charge) and the costs of protracted court proceedings against high profile individuals and corporations. In contrast, civil and administrative remedies have often been favoured and have often had more success, especially when minor breaches were the subject of regulatory attention.

This is one reason that it can be argued that a civil law culture has emerged in relation to corporations law misconduct in Australia.[46] In passing, it might also be noted that some have pointed out that the investigation and enforcement powers of Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC) are probably narrower than those of some comparable foreign counterparts (such as in the USA and UK) and that there is arguably a case for their expansion to facilitate improved enforcement action[47].

There have been calls in Australia for the expansion of the range of criminal sanctions for corporate crime, such as by imposing greater personal liability upon individuals who operate behind the protection of the corporate form,[48] as well as arguments concerning the lifting of the veil of incorporation so as to more effectively deal with criminal conduct by corporate controllers.[49] However, a ‘silent revolution’ in Australian company law enforcement has seen the increase in the range of non-criminal sanctions.[50] But, despite the calls for greater external regulation of companies, in the longer term, it has been recognised by many that social control within the corporation is largely affected by the ethical culture of the corporation[51] and perceptions of the risk of apprehension.[52]

The effective enforcement of corporations law provisions cannot be left to external regulators but must begin within the corporation itself; this might be described as ‘upstreaming’ rather than the current ‘downstreaming’ methods that tends to be used. An approach that relies upon external ‘downstream’ responses must then grapple with the problem of depleted assets and fewer resources to compensate those who have suffered as a result of corporate law breaches. This is akin to responding after the proverbial ‘horse has bolted’ and, as such, this is not the best way of seeking to protect the array of stakeholders in the corporation.

It is interesting to note that in the report of the HIH Royal Commission in 2003, the Royal Commissioner noted that the particular corporate governance model used by a company was less important than the internal culture of compliance that existed within that company. As Royal Commissioner Justice Owen noted: ‘I am not so much concerned with the content of a corporate governance model as with the culture of the organisation to which it attaches. This is where the evidence I heard about HIH disclosed market shortcomings.’[53] The Royal Commissioner added:

For me the key to good corporate governance lies in substance, not form. It is almost the way the directors of a company create and develop a model to fit the circumstances of that company and then test it periodically for its practical effectiveness. It is about the directors taking control of a regime they have established and for which they are responsible. These concepts do not lend themselves to specification in something such as a code of best practice.[54]

His Honour also noted that despite a few defects, the actual form of the corporate governance model used by HIH would probably have been regarded as satisfactory, although the substance was lacking; this suggests that cultural issues of social control need to be addressed by fashioning suitable internal governance standards within the corporation and not simply relying upon the force of formal legal rules.[55] That the internal cultural problems within HIH are not unusual in Australian corporations may be illustrated by reference to other recent examples of failures of corporate social control, as has been illustrated, for example, in much evidence presented to the Australian Wheat Board (AWB) Royal Commission[56]

and in proceedings arising from one of Australia’s largest corporate fraud cases involving foreign exchange traders in the National Australia Bank.[57]

These conclusions parallel findings from a broad range of academic scholarship over the last two decades; as Gobert and Punch summarised this position recently,

Committing itself, and adhering to, a system of self-regulation will imbue a company with an ethos of compliance. This ethos will be internalised and become part of the company’s ‘personality’, and the company will have developed the corporate equivalent of a ‘conscience’. At this point, one can anticipate a heightened sense of civic responsibility, along with a commitment not simply to the letter of the law, but also to its spirit. Rather than being a ‘negative externality’ that must be achieved in order not to incur the wrath of external regulatory agencies, compliance will become part and parcel of the corporate culture.[58]

The protracted and difficult nature of corporate and securities law enforcement through the courts is well illustrated by the convoluted international saga of the Offset Alpine Printing case involving leading Australian business personalities and a leading stockbroker, the late Rene Rivkin. In this case, Rivkin and his associates had acquired control of a printing destroyed the company’s printing works in late 1993; subsequently Rivkin was involved in market manipulation of shares in this company (Offset Alpine) and in late 1994 and early 1995 he used funds that he held in a secret Swiss bank account to disguise his identity as the seller of shares in an illegal buy-back of shares in this company. This also involved breaches of the disclosure provisions of the Corporations Act. The investigation and prosecution of these transactions took place over a decade and proceedings in this matter have yet to be finally completed.[59] In the meantime, Rivkin passed away in 2005 after being convicted for insider trading in an unrelated matter.

In the context of cases such as these, and having regard to its regulatory objectives, ASIC has focussed on seeking to find an appropriate ‘regulatory mix’ of enforcement strategies.[60] As we have seen above, this approach assumes that the main function of the Commission is to maintain confidence in the market and not to take risks, which unnecessarily interfere with the market. This is akin to the argument that one of the key functions of corporate law is to provide legitimacy to business decision making.[61] In similar terms, the Australian Treasurer, who was responsible for many Australian corporate law reforms during the last decade, has argued that it is necessary to take an economic approach to corporate law reform and to ensure that this body of law is conducive to wealth creation and that it maintains Australia’s competitive position in relation to other countries.[62]

Research on Australian corporate law enforcement

If we review the contents of Australia’s two main corporate law journals over the last two decades[63], we find that a number of ad hoc studies and generally narrowly based studies have been undertaken in Australia to assess the degree to which corporate laws have been enforced or are enforceable. These have included general studies of: the culture of corporate law enforcement[64] and have also seen studies of civil actions and criminal law enforcement actions in the courts[65] These studies have also looked at such areas as:

• Insider trading law enforcement,[66]

• Breaches of the duties of directors provisions[67], and

• Abuses of the insolvency provisions (such as the widespread occurrence of phoenix company transactions).[68]

There have also been a number of studies of particular Corporations Act remedies, such as research into:

• Problems with the use of civil penalty orders,[69]

• The use of the oppression remedy by minority shareholders,[70]

• Disqualification and banning orders in regard to directors,[71]

• The use of enforceable undertakings by the regulatory commission,[72] and

• The enforcement of corporate disclosure rules[73] (this has included efforts to refine doctrines of intent and restitution in relation to corporate crimes[74]).

• The judicial enforcement of stock exchange listing rules has also received some attention.[75]

Another line of legal development has seen a steady increase in Australian legislative efforts to impose criminal liability for manslaughter upon corporations and their controllers, although these law reform efforts have tended to be reflected in statutes other than the Corporations Act, such as occupational health and safety legislation and in environmental legislation.[76]

However, very few of these studies have been empirically based so that it is necessary to rely upon statistical data found in annual reports of ASIC. Nevertheless, Helen Bird and her colleagues at the University of Melbourne have reported some useful empirical studies.[77] For example, Bird and her colleagues were able to examine the circumstances in which the Australian corporate regulator was able to resort to more serious regulatory responses (or ‘the hierarchical ordering of sanctions’) of the kind that would be found at the apex of strategic regulation pyramid developed by Ayers and Braithwaite.[78]

The 2005 study by Bird and her colleagues examined 1438 court based ASIC enforcement actions completed during a three year period from January 1997; while 1243 matters involved Australian private or proprietary companies (proprietary companies tend to be much smaller than public companies), 79 actions involved an Australian public company. Civil enforcement actions were brought to court in 122 matters and penal actions were brought in 1316 matters. Because many of the latter cases were matters involving external administration, if these were excluded, the number of penal matters brought to court was reduced to 450. [79] These penal matters could be civil penalty orders or criminal matters. These researchers found that the corporate regulator was more likely to pursue court-based enforcement action (whether civil or penal) against individuals (usually company directors), rather than against companies.

Corporations Act enforcement action through the courts seem to be taken as a last resort in Australia and tend to be most vigorously pursued in relation to breaches in laws that were mandatory in nature (such as breaches of the director’s duties provisions); prosecutions in relation to private companies tended to arise is circumstances where these companies were no longer in existence; in the case of public companies, Bird et al suggest that, because of closer proximity to these entities.

The Australian corporate regulator ‘may have adopted a strategy of long-term cooperation with public companies to ensure their general compliance with the Corporations Law at the expense of routine infringements of that law’.[80] Given the limits of this careful study, in that it only examined court based enforcement action by ASIC, there is room for a much more comprehensive study of corporate law regulation and enforcement that builds upon this existing body of Australian work.

This broader approach has been suggested in the new literature on regulation.[81] This approach cuts across the older distinction between public and private laws, so that private institutions may help to regulate public space;[82] similarly, private space may be regulated in non-traditional ways, such as through the use of ‘soft law’ like industry codes, international corporate governance standards and corporate social responsibility norms. Public regulation is to some degree being supplemented by private forms of regulation, such as compliance programs within the corporation; however, such self regulatory compliance programs need to be open to scrutiny by outside or by public entities as companies cannot be left alone to monitor the effectiveness of these compliance programs.[83]

Christine Parker argues that there are three distinct stages in corporate responsibility for self regulation: firstly, a commitment to respond by way of self regulation; secondly, the acquisitions by the corporation of specialised compliance management skills and know how (such as the appointment of compliance officers); and thirdly, institutionalising compliance as a holistic and central objective of the corporation. Each of these stages should be able to be evaluated, such as by reference to international corporate governance principles and standards on compliance programs developed by bodies such as the Australian Standards Association.[84] Parker goes on to argue that each company should have a ‘Justice Plan’ to allow it to engage effectively with external stakeholders and to allow these stakeholders (such as the official corporate regulator) to assess the integrity of the internal compliance systems.[85]

Others have suggested structural mechanisms within the corporation to facilitate greater accountability upon the part of the Board of directors. Some years ago Braithwaite suggested the use of enforced self-regulation as a means of dealing with the control of corporate crime.[86] More recently, McConville and Bagaric suggest that Australian companies be required to set up mandatory shareholder committees. This reform is seen as a means of creating a bridge between ownership and control within the company and as a means of creating greater shareholder happiness as a result of their participation in the affairs of the company. Under this proposal, the Board would retain the power to make key corporate decisions, but the shareholders committee would be able to review shareholder grievances, but its role would be predominantly advisory in nature.[87]

Providing shareholders with a capacity to bring effective derivate actions may also provide another mechanism for ensuring that internal rules are complied with by corporate controllers. In some countries where corporations may have a two tier board structure, other groups such as employees are given much greater roles in monitoring the internal affairs of the corporation. This strategy has had varying degrees of effectiveness. The greater involvement of other stakeholders in monitoring the corporation’s internal affairs is consistent with the so-called ‘team production’ model of the corporation. [88]

Some useful insights into what may be possible in regard to corporate law enforcement may be obtained from new regulatory approaches to ensuring corporate compliance with consumer laws where moral suasion, soft law and other techniques are used to bring about more effective consumer regulation.[89] As Iain Ramsay observes:

Broadening participation in regulatory processes can serve to make standard setting more democratic, responsive to wider forms of knowledge, and ensure greater likelihood of acceptance by all groups. However, these objectives are often difficult to achieve in practice.[90]

The resort to a web of different regulatory strategies that supplements public regulation and draws upon the power of self regulation within the private governance mechanisms of the corporation may provide a more effective system of corporate regulation; this is especially important in contexts where public regulation is relatively weak, such as in regard to global transactions of the company. The OPEC, as an ‘espitemic community’ plays a critical role in developing new governance principles which are often more important that formal legal rules.[91] All this suggests the need for rethinking regulation in a context where international networks (such as in regard to corporate governance) are becoming increasingly important.[92] But, Christine Parker and others have noted, there is still a great deal of detail that needs to be developed in putting in place robust internal systems of self regulation and monitoring within companies so as to create a more transparent and ultimately more competitive corporation.[93]


It is clear that there are significant challenges facing efforts to make corporations law more effective. This obviously involves a balancing of legislative policy, regulatory pragmatism and regulatory theory. To-date, we are still at a relatively early stage of development with this research and policy agenda. However, following recent corporate collapses in Australia and the United States, there has been an emerging body of literature calling for more effective internal control measures within companies. Legislatively, this is reflected in the internal financial or accounting compliance mechanisms that have been mandated by ss 302 and 404 of the US Sarbanes Oxley Act.[94] However, it is necessary to go beyond financial compliance issues in developing a broader internal culture of compliance within the corporation.

We have tended to see much effort being put into crafting new legislative rules and in developing enforcement strategies. However, much remains to be done in ensuring that regulators and the courts in Australia focus upon achieving effective enforcement strategies in regard to the Corporations Act. Another challenge for Australian corporate law is to facilitate the further refinement of corporate accountability and enforcement mechanisms and facilitate the availability of remedies by a wider range of stakeholders whilst more effectively internalising a culture of ethics and social control within the corporation itself.[95]

The problem of effectively enforcing the provisions of the Australian Corporations Act has yet to be dealt with comprehensively or in an integrated way. On the whole it has tended to be dealt with pragmatically in a fragmented or ad hoc way; as a result it has been vulnerable to various convenient but unstable and imprecise strategies (such as those built upon the distinction between civil and criminal remedies). We have yet to apply a comprehensive analytic model to this area. As a result, corporate regulators have tended to justify themselves by focussing on a few high profile matters or court cases. Ultimately, the effective handling of the problem of enforcement requires that primary attention be focussed on enforcement within the corporation itself, long before problems in the cycle of corporate collapse have manifested themselves once again.

Corporations law enforcement is a much broader concern than the narrow focus upon external regulation by regulatory commissions that generally operate in a reactive rather than a pro-active way. This has seen the adoption of a narrow law enforcement or punishment-based model, rather than of a more organic compliance model of enforcement within the corporation itself. Despite the development of excellent theoretical models of regulation (such as those developed in the work of Braithwaite and his colleagues discussed earlier) we have yet to see the problem of enforcement dealt with comprehensively within the corporation itself, as was suggested by the HIH Royal Commission when it stressed the importance of substantive compliance rather than formal compliance measures.

Particular enforcement strategies have been reactive and ad hoc in their approach and they have tended to view the problem of enforcement from the particular bureaucratic or policy goals of the enforcement agency, such as ASIC. This is useful in so far as it goes, but it falls far short of providing effective enforcement or implementation of this body of law. It is argued here that it is therefore necessary to supplement the waning power of the State as regulator with more effective internal or organic enforcement mechanisms within the corporation itself. This has become increasingly important as the corporation has become a global actor and moved across and sometimes outside national systems of corporate regulation.

Perhaps it is too much to expect corporations to look at applying these internal compliance strategies themselves, but efforts must be made to create incentives for directors and managers to move in this direction. The challenge for corporate law reformers and legal scholars is to broaden the debate on corporate law enforcement and move beyond limited punishment-based models of deterrence and law enforcement. This is the major challenge facing us as we move into the next state of development of Australian corporations law.

[∗] MA LLB (Syd), PhD (NSW), SJD (Wisconsin); Research Professor, Faculty of Business and Law, School of Law and Centre for International Corporate Governance Research, Victoria University, Melbourne; Email: This is a revised version of a paper originally presented at the International Summit on Company Law Reform, China University of Politics and Law, Beijing, 22-23 April 2006.

[1] For a wider theoretical discussion of the issue of modernisation of Australian company law see: R Tomasic, ‘The modernisation of corporations law: Corporate law reform in Australia and beyond’ (2006) 19 Aust Jnl of Corp Law 1.

[2] See generally, JN Gordon and MJ Roe (eds), Convergence and Persistence in Corporate Governance, Cambridge, Cambridge University Press, 2004. Also see: D Branson, ‘The Uncertain Prospect of Global Convergence in Corporate Convergence’, in LC Keong (ed), Corporate Governance: An Asia-Pacific Critique, Hong Kong, Sweet & Maxwell, 2002.

[3] See generally, BR Cheffins, ‘Corporate Governance Convergence: Lessons from Australia’ (2002) 16 The Translational Lawyer 13-43; and BR Cheffins, (13-38) ‘Comparative Corporate Governance and the Australian Experience’ in I Ramsay (ed), Key Developments in Corporate Law and Trust Law: Essays in Honour of Professor Harold Ford, Sydney, LexisNexis Butterworths, 2002.

[4] For a discussion of such generic company law features, see generally, RR Kraakman et al, The Anatomy of Corporate Law, Oxford, Oxford University Press, 2004. Some have even optimistically sought to conceptualise this development as the culmination of a process of historical development: see H Hansmann and R Kraakman, ‘The End of History for Corporate Law’ (2001) 89 Georgetown Law Journal 439.

[5] For a review of the changing nature of ‘modernity’ since the mid nineteenth century see further, B se Sousa Santos, Toward a New Legal Common Sense, Second Edition, London, Butterworths LexisNexis, 2002, especially at pp 39-60.

[6] In contrast to the United States, Australia has not seen much evidence of competition among Australian states for company incorporations leading to dramatic differences in the form or content of State corporate law statutes; however, the States have sought to protect their company registration revenues by entering into favourable agreements with the national government as a condition of referring state incorporation powers to the national government; see by way of contrast: R Romano, ‘The State Competition Debate in Corporate Law’ in R Romano (ed), Foundations of Corporate Law, New York, Oxford University Press, 1993; and L Bebchuk, ‘Federalism and the Corporation: The Desirable Limits on State Competition in Corporate Law’ (1992) 105 Harvard Law Review 1437.

[7] See further Tomasic, above n 1, at 20-33.

[8] Section 659AA of the Corporations Act 2001 (Cth) provides that the Takeover Panel and not the courts is to be ‘the main forum for resolving disputes about a takeover bid’ in Australia. This reform seeks to overcome the excessive use of the courts in Australian takeover disputes that has occurred in the last two decades; see further GFK Santow and G Williams, ‘Taking the Legalism out of Takeovers’ (1997) 71 Australian Law Journal 749; R Tomasic and PD Pentony, ‘Resisting to the Last Shareholders’ Dollar: Takeover Litigation – A Tactical Device’ (1991) 11 Aust Jnl of Corp Law 154 and R Tomasic and BD Pentony, ‘Fast-Tracking Takeover Litigation and Alternatives to the Courts in Company Takeover Disputes’ (1989) 17 Australian Business Law Review 336. Also see: E Armson, ‘Decision-making by the Takeovers Panel in its first five years’ (2006) 34 Australian Business Law Review 105.

[9] See further, Part 5.3A of the Corporations Act 2001. Also see, J Routledge, ‘An Exploratory Empirical Analysis of Part 5.3A of the Corporations law (Voluntary Administration)’, (1998) 16 C&SLJ 4-15.

[10] See further s 1(2) of the Australian Securities and Investments Commission Act 2001.

[11] These are known as replaceable rules in Australia; see further, s 141 which provides a table of 39 replaceable rules under the Corporations Act. Also see generally, BS Black and K Kraakman, ‘A Self Enforcing Model of Corporate Law’ (1996) 109 Harvard Law Review 1911 and JN Gordon, ‘The Mandatory Structure of Corporate Law’ (1989) 89 Columbia Law Review 1549.

[12] See further, Part 2F.1A of the Corporations Act 2001 which allows a person to bring proceedings in the name of and on behalf of a company; such actions may be brought where certain conditions are met (under s 237(1)). Namely, the Court must be satisfied that the company will not bring the proceedings, the applicant must be acting in good faith and there must be is a serious question to be tried and the Court must believe that it is in the best interests of the company that such proceedings take place.

[13] See s 588G of the Corporations Act 2001.

[14] See s 729(1) of the Corporations Act 2001.

[15] For example, provision has recently been made for enhanced auditor independence (ss 324CE and 324CF(7)), the rotation of auditors every five years (s 324DA(1)), the imposition of limits on the number of hours that may be spent by an auditor in delivering non-audit services to a company (s 324CE(6) and s 324CF(6)), and the referral of suspect company financial matters to a Financial Reporting Panel (ss 323EA- s 323EM). For a long time there were concerns about the capacity of auditors to assist in uncovering fraud or illegality under the corporations Act; see further, R Tomasic, Auditors and the Reporting of Illegality and Financial Fraud’ (1992) 20 Australian Business Law Review 198-229. However, the collapse of Enron in the United States and HIH in Australia led to a renewed focus upon this area and saw a strengthening of auditor related legislative provisions: see further the Australian government’s Corporate Law Economic Reform Program’s Audit Reform and Corporate Disclosure Act 2004.

[16] See s 1311 and Schedule 3 of the Corporations Act 2001

[17] See, Part 9.4AA of the Corporations Act 2001.

[18] See, Part 9.4B of the Corporations Act 2001. Also see generally, A Rees, ‘Civil penalties: Emphasising the adjective or the noun’ (2006) 34 Australian Business Law Review 139.

[19] See generally, N Andrews, ‘If the dog catches the mice: The civil settlement of criminal conduct under the Corporations Act and the Australian Securities and Investment Act’, (2003) 15 Aust Jnl of Corp Law 137-168. Also see J P Knackstredt, ‘The Use of Civil Penalty Proceedings’, (2006) 24 C&SLJ 56-61.

[20] This is provided for by s 180(2) of the Corporations Act; see further, RP Austin, HAJ Ford and IM Ramsay, Company Directors – Principles of Law and Corporate Governance, Sydney, LexisNexis Butterworths, 2005 at 237-259; for a critique of this reform see: A Clarke, ‘The business judgment rule – good corporate governance or not?’ (2000) 12 Aust Jnl of Corp Law 85-97.

[21] It is however interesting to note that the Commonwealth Government has recently seen the need to provide additional funding to ASIC so as to allow it to better cope with litigants whose access to financial resources is such that the Commission has found it difficult to respond effectively: see further, M Moncrieff, ‘Budget 2006: ASIC gets hands on war chest’, The Age, 11 May 2006, Business 5.

[22] See for example, T Frankel, Trust and Honest: America’s Business Culture at a Crossroad, New York, Oxford University Press, 2006; LE Mitchell, Corporate Irresponsibility: America’s Newest Export, New Haven, Yale University Press, 2001. Also see: RC Clark, Corporate Governance Changes in the Wake of the Sarbanes-Oxley Act: A Morality Tale for Policymakers Too, Harvard Law School John M. Olin Center for Law, Economics and Business & the Program on Corporate Governance, Discussion Paper No. 525, Sept. 2005, available at:


[23] Section 302 provides that the SEC is required to ensure that in the annual or quarterly company reports the principal executive officers of companies must certify that the contents of their report does not contain a statement or omission that is materially untrue; that a company’s financial statements fairly present the company’s position and that the executive officer has established and maintained an effective internal control system for the company. In addition, in regard to financial reporting, s 404 provides that management is responsible for establishing and maintaining ‘an adequate internal control structure and procedures for financial reporting’. Corporate management is also required by s 404 to make an ‘assessment, as of the end of the most recent fiscal year of the issuer, of the effectiveness of the internal control structure and procedures of the issuer for financial reporting’. The SEC has now also issued more detailed rules regarding the operation of SOX s 404: see further:

and in regard to SOX s 302 see:


[24] See generally, M Blair and L Stout, ‘A Team Production Theory of Corporate Law’, (1999) 85 Va. L. Rev 247.

[25] To some extent, this is an extension of earlier work by the author on corporate crime; see further, R Tomasic, ‘Corporate Crime’, (pp 253-269) in D Chappell and P Wilson (eds), The Australian Criminal Justice System: The Mid 1990s, Sydney, Butterworths, 1994; R Tomasic, ‘Corporate Crime and its Regulation: Issues and Prospects’ (259-270) in D Chappell and P Wilson (eds) Crime and the Criminal Justice System in Australia: 2000 and Beyond, Sydney, Butterworths, 2000; and R Tomasic, ‘From White-Collar to Corporate Crime and Beyond: the Limits of Law and Theory’, (252-267) in D Chappell and P Wilson (eds), Issues in Australian Crime and Criminal Justice, Sydney, LexisNexis Butterworths, 2005. Also see, R Tomasic, ‘Governance and the evaluation of corporate law and regulation in Australia’ (2001) 1(3) Corporate Governance 24-32.

[26] See further, R Tomasic, ‘Corporate collapse, crime and governance – Enron, Andersen and beyond’ (2002) 14 Aust Jnl of Corp Law 183-201.

[27] See further, L Beltram, ‘WorldCom files largest bankruptcy ever: Nation’s No 2 long-distance company in Chapter 11 – largest with $107 billion in assets’ CNN/Money, 22 July 2002; available at:


[28] See further, Bob Briton, ‘Parmalat black hole: Scandal on a global scale with consequences for Australia’ The Guardian, January 28, 2004; and S Arie, ‘Parmalat dream goes sour : Sophie Arie reports from Rome on the spectacular downfall of Calisto Tanzi and his dairy empire: The Observer, Sunday January 4, 2004; available at,6903,1115471,00.html


[29] See generally, FL Clarke, GW Dean and KG Oliver, Corporate Collapse: Regulatory, Accounting and Ethical Failure, Revised Edition, Melbourne, Cambridge University Press, 2003.

[30] See The Hon Justice Neville Owen, the HIH Royal Commission, The Failure of Insurance, Volume 1: A corporate collapse and its lessons, Canberra, Commonwealth of Australia, 2003. See further at


[31] These corporate collapses involved the following companies: Bond, Budget, Duke Group and Equiticorp Groups, Estate Mortgage, Qintex, Lintner, Spedley, Rothwells; only six prosecutions emerged from 252 charges that had been laid in these matters: see discussion in V Comino, ‘High Court relegates strategic regulation and pyramidal enforcement to insignificance’ (2005) 18 Aust Jnl of Corp Law 48-67 at p 55.

[32] See Australian Securities Commission, Annual Report 1991/92 at pp 40-41.

[33] Examples of the work by Braithwaite and his colleagues include: J Braithwaite, Restorative Justice & Responsive Regulation, New York, Oxford University Press, 2002; J Braithwaite, ‘Rewards and Regulation’, (2002) 2 Journal of Law and Society 12-26; B Fisse and J Braithwaite, Corporations, Crime and Accountability, Cambridge, Cambridge University Press, 1993; C Parker and J Braithwaite, ‘Regulation’, (pp 119-45) in P Cane and M Tushnet (eds) The Oxford Handbook of Legal Studies, Oxford, Oxford University Press, 2003; T Makkai and J Braithwaite, ‘Praise, Pride and Corporate Compliance’ (1993) 21 International Journal of the Sociology of Law 73-91. Also see C Parker, The Open Corporation: Effective Self-regulation and Democracy, Cambridge, Cambridge University Press, 2002.

[34] J Ayers and J Braithwaite, Responsive Regulation: Transcending the Deregulation Debate, New York, Oxford University Press, 1992.

[35] For a discussion of this theory see further, Ayers and Braithwaite, above at 35; C Dellit and B Fisse, ‘Civil and Criminal Liability under Australian Securities Regulation: The Possibility of Strategic Enforcement’ in G Walker and B Fisse (eds), Securities Regulation in Australia and New Zealand, Auckland, Oxford University Press, 1994 at 588; also see further, V Comino, ‘High Court relegates strategic regulation and pyramidal enforcement to insignificance’ (2005) 18 Aust Jnl of Corp Law 48-67 at 57ff; and H Bird, D Chow, J Lenn and I Ramsay, ‘Strategic Regulation and ASIC enforcement patterns: Results of an empirical study’, (2005) 5 Journal of Corporate Law Studies 191-246.

[36] The Lavarch Report, Corporate Practices and the Rights of Shareholders, House of Representatives Standing Committee on Legal and Constitutional Affairs, Canberra, AGPS, 1991, at p 221; and the Cooney Report, Company Directors’ Duties :Report on the Social and Fiduciary Duties and Obligations of Company Directors, Senate Standing Committee on Legal and Constitutional Affairs, Canberra, AGPS, 1989.

[37] See further, MK Sparrow, The Regulatory Craft: Controlling Risks, Solving Problems, and Managing Compliance, Washington, Brookings Institution Press, 2000.

[38] [2004] HCA 42; (2004) 209 ALR 271.

[39] V Comino, ‘High Court relegates strategic regulation and pyramidal enforcement to insignificance’ (2005) 18 Aust Jnl of Corp Law 48-67 at 67.

[40] J Farrar, Corporate Governance: Theories, Principles and Practice, 2nd edition, Melbourne, Oxford University Press, 2005 at 234.

[41] Trevor Sykes has reviewed this literature in a number of books including: T Sykes, The Money Miners: Australia’s Mining Boom 1969-1970, Sydney, Wildcat Press, 1978; T Sykes, Two Centuries of Panic: A History of Corporate Collapses in Australia, Sydney, Allen & Unwin, 1988 and T Sykes, The Bold Riders: Behind Australia’s Corporate Collapses, Sydney, Allen & Unwin 1994.

[42] See however, ASIC Policy Statement 52, ‘Enforcement Action Submissions’.

[43] See generally, B Hindess, The Use of Official Statistics in Sociology, London, Macmillan, 1973.

[44] ASIC Annual Report 2003-2004 at p 35.

[45] See generally, R Tomasic, ‘Corporate Crime: Making the Law More Credible’ (1990) 8 C&SLJ 369-82. This is a problem that many other researchers have also discussed: see, for example, D McBarnet and C Whelan, Creative Accounting and the Cross-Eyed Javelin Thrower, Chichester, Wiley, 1999.

[46] See generally, R Tomasic, ‘Corporate crime in a civil law culture’ (1994) 5 Current Issues in Criminal Justice 244-55.

[47] See further, T Middleton, ‘ASIC’s investigation and enforcement powers – current issues and suggested reforms’ (2004) 22 C&SLJ 503-530.

[48] See for example, M Bagaric and J du Plessis, ‘Expanding criminal sanctions for corporate crimes – deprivation of right to work and cancellation of education qualifications’ (2003) 21 C&SLJ 7-25; Also see J McConvill and M Bagaric, ‘Criminal responsibility based on complicity among corporate officers’ (2004) 16 Aust Jnl of Corp Law 172-185.

[49] See for example, D Parker, ‘Piercing the veil of incorporation: company law for a modern era’ (2006) 19 Aust Jnl of Corp Law 35-64.

[50] J Duns, ‘The Silent Revolution: The Changing Nature of Sanctions in Companies and Securities Legislation’ (1991) 9 C&SLJ 365-376.

[51] This is a theme that has long been explored in the United States by scholars; see, for example, C Stone, Where the Law Ends: The Social Control of Corporate Behavior, New York, Harper & Row, 1975; and R Jackall, Moral Mazes: The World of Corporate Managers, New York, Oxford University Press, 1988. See also, D Campbell, ‘The Role of Monitoring and Morality in Company Law: A Criticism of the Direction of Present Regulation’ (1997) 7 Aust Jnl of Corp Law 343-365; and S Miller, ‘Corporate Crime, the Excesses of the 80s and Collective Responsibility: an Ethical Perspective’ (1995) 5 Aust Jnl of Corp Law 139-153.

[52] In regard to this risk of apprehension as a factor in corporate crime, see further, R Tomasic and BD Pentony, ‘Crime and Opportunity in the Securities Industry: The Case of Insider Trading in Australia’ (1989) 9 C&SLJ 186-198.

[53] The Hon Justice Neville Owen, the HIH Royal Commission, The Failure of Insurance, Volume 1 : A corporate collapse and its lessons, Canberra, Commonwealth of Australia, 2003 at 133.

[54] Ibid at 133.

[55] A Armstrong, ‘Corporate governance standards: intangibles and their tangible value’, (2004) 17 Aust Jnl of Corp Law 97-110.

[56] AAP, ‘AWB chief admits deceiving UN’ The Age, 19 January 2006. This deception even touched BHP-Billiton, one of Australia’s largest companies; See further at:


[57] See for example E Johnston, ‘NAB traders had to toe the chief’s line’, The Australian Financial Review 3 May 2006 at 3 and N Robinson, ‘ ‘Smoothing part of NAB culture’ ‘ The Australian, 3 May 2006, at 2.

[58] J Gobert and M Punch, Rethinking Corporate Crime, London, Butterworths LexisNexis, 2003 at p 344.

[59] For a detailed review of this case see: N Chenoweth, Packer’s Lunch – A rollicking tale of Swiss bank accounts and money-making adventures in the roaring ‘90s, Crows Nest, Allen & Unwin, 2006.

[60] A Cameron, ‘Enforcement, Getting the Regulatory Mix Right’ (1994) 4 Aust Jnl of Corp Law 121-128.

[61] See generally, M Stokes, ‘Company Law and Legal Theory’ in W Twining (ed), Legal Theory and Common Law, Oxford, Basil Blackwell, 1986.

[62] P Costello MP, ‘Is the Corporations Law Working ?’ (1992) 2 Aust Jnl of Corp Law 12-19.

[63] These are the Australian Journal of Corporate Law and the Company & Securities Law Journal. Of course there is a much wider body of writing on this subject than is found in these two corporate law journals, but they are nevertheless generally representative of the legal academic literature in this area.

[64] R Tomasic, ‘Corporations Law Enforcement Strategies in Australia: The Influence of Professional, Corporate and Bureaucratic Cultures’ (1993) 3 Aust Jnl of Corp Law 192-229; and R Tomasic, ‘Corporate Crime in a Civil Law Culture’: (1994) 5 Current Issues in Criminal Justice 244-55.

[65] A good example of such a study was undertaken by H Bird, D Chow, J Lenn and I Ramsay, ‘Strategic Regulation and ASIC enforcement patterns: Results of an empirical study’, (2005) 5 Journal of Corporate Law Studies 191-246. Also see R Tomasic, ‘Sanctioning Corporate Crime and Misconduct: beyond Draconian and Decriminalization Solutions’ (1992) 2 Aust Jnl of Corp Law 82-114.

[66] R Tomasic and BD Pentony, Casino Capitalism ? Insider Trading in Australia, Canberra, Australian Institute of Criminology, 1991; also see M Gething, ‘Insider Trading Enforcement: Where Are We Now and Where Do We Go From Here ?’ (1998) 16 C&SLJ 607-627 and W Hogan, ‘Insider Trading’, (1988) 6 C&SLJ 39-50; S Rubinstein, ‘The Regulation and Prosecution of Insider Trading in Australia: Towards Civil Penalty Sanctions for Insider trading’ (2002) 20 C&SLJ 89-113; and CZ Qu, ‘The efficacy of insider trading civil liability regime in the Corporations Act(2002) 12 Aust Jnl of Corp Law 161-182. Also see in this regard, R Tomasic, ‘Insider Trading Law Reform in Australia (1991) 9 C&SLJ 121-143; and R Tomasic and BD Pentony, ‘The Extent of Insider Trading in Australia: A Socio-Legal Account’ (1990) 23 Australian and New Zealand Journal of Criminology 125.

[67] See generally, R Tomasic and S Bottomley, Directing the top 500: Corporate Governance and Accountability in Australian Companies, Sydney, Allen & Unwin, 1993.

[68] See for example, FL Clarke, GW Dean and KG Oliver, Corporate Collapse: Regulatory, Accounting and Ethical Failure, Revised Edition, Melbourne, Cambridge University Press, 2003; and R Tomasic, ‘Phoenix Companies and Corporate Regulatory Challenges’ (1996) 6 Aust Jnl of Corp Law 461-465; R Tomasic, ‘Companies and Rogue Directors: A Note on a Program of Law Reform’ (1995) 5 Aust Jnl of Corp Law 474-80; NF Coburn, ‘The Phoenix Reexamined’ (1998) 8 Aust Jnl of Corp Law 321-331. For a general assessment of the effectiveness of Australia’s insolvency provisions see further, Parliamentary Joint Committee on Corporations and Financial Services, Corporate Insolvency Laws: a Stocktake, Canberra, Commonwealth of Australia, 2004; available at:

[69] See generally, S Bird, ‘The Problematic Nature of Civil Penalties in the Corporations law’ (1996 ) 17 C&SLJ 405-427. Also see: M Welsh, ‘Eleven years on – An examination of ASIC’s use of an expanding civil penalty regime’ (2004) 17 Aust Jnl of Corp Law 175-195; Welsh notes (at 193-4) that between 1993 and May 2004, a total of 25 civil penalty applications had been issued by the Commission, with orders being obtained in 18 of these cases. Also, M Welsh, ‘Adler, Whitlam, Elliott and others: Judicial interpretation of the civil penalty provisions of the Corporations Act 2001 (Cth)’, (2005) 18 Aust Jnl of Corp Law 243-262.

[70] I Ramsay, ‘An Empirical Study of the Oppression Remedy’ (1999) 27 Australian Business Law Review 23.

[71] T Middleton, The High Court’s decision in Rich v ASIC [2004] HCA 42 and its potential impact upon ASIC’s disqualification orders, banning orders and oral examinations’ (2005) 23 C&SLJ 248-263. Also see, J Cassidy, ‘Disqualification of Directors Under the Corporations Law’ (1995) 13 C&SLJ 221-239.

[72] M Nehme, ‘Enforceable Undertakings in Australia and Beyond’ (2005) 18 Aust Jnl of Corp Law 68-87 at pp 71-73; see further s 93AA of the ASIC Act 2001.

[73] I Ramsay and R Hoad, ‘Disclosure of Corporate Governance Practices by Australian Companies’ (1997) 15 C&SLJ 454. Also see M Blair and I Ramsay, ‘Mandatory Corporate Disclosure Rules and Securities Regulation’ ( 55-87) in G Walker, B Fisse and I Ramsay (eds) Securities regulation in Australia and New Zealand, 2nd edition, Sydney, Law Book Co, 1998.

[74] See generally, G Acquaah-Gaisie, ‘Corporate crimes: Criminal intent and just restitution’ (2001) 13 Aust Jnl of Corp Law 219-228.

[75] D Brewster, ‘Judicial Enforcement of the Listing Rules of the Australian Stock Exchange’ (1991) 9 C&SLJ 313-333.

[76] See further, R Edwards, ‘Corporate killers’ (2001) 13 Aust Jnl of Corp Law 231-251.

[77] See for example, H Bird, The Problematic Nature of Civil Penalties in the Corporation Law’ (1996) 14 C&SLJ 405-427. Also see H Bird, D Chow, J Lenn and I Ramsay, ‘Strategic Regulation and ASIC Enforcement Patterns: Results of an empirical study’ (2005) 5 Journal of Corporate Law Studies 191-246; and G Gilligan, H Bird and I Ramsay, Research Report: Regulating Director’s Duties _ How Effective are the Civil Penalty Sanctions in the Australian Corporations Law ?, Centre for Corporate Law and Securities Regulation, University of Melbourne, 1999 and G Gilligan, H Bird and IM Ramsay, ‘Civil Penalties and the Enforcement of Director’s Duties’ [1999] UNSWLawJl 3; (1999) 22 University of New South Wales Law Journal 417.

[78] Bird et al (2005) above at p 202

[79] Ibid 227.

[80] Ibid 243.

[81] See for example, C Parker et al, (eds), Regulating Law, Oxford, Oxford University Press, 2004; C Parker and J Braithwaite, ‘Regulation’ in P Cane and M Tushnet (eds), The Oxford Handbook of Legal Studies, Oxford, Oxford University Press, 2003 at 119; and S Picciotto and D Campbell, ‘New Directions in Regulatory Theory’ Special Issue of Journal of Law and Society, (2002) 29(1) Journal of Law and Society 1-225.

[82] See for example, C Scott, ‘Private Regulation of the Public Sector: A Neglected Facet of Contemporary Governance’ (2002) 29 Journal of Law and Society 56-76.

[83] See further, C Parker, ‘Is there a reliable way to evaluate organisational compliance programs?’, (pp 107-118) in R Johnstone and R Sarre, Regulation: Enforcement and Compliance, Canberra, Australian Institute of Criminology, 2004.

[84] Ibid 107-111.

[85] Ibid 110.

[86] J Braithwaite, ‘Enforced Self-regulation: A New Strategy for Corporate Crime Control’ (1982) 80 Michigan Law Review 1466.

[87] J McConville and M Bagaric, ‘Towards Mandatory Shareholder Committees in Australian Companies’ [2004] MelbULawRw 4; (2004) 28 Melbourne University Law Review 125 at 158.

[88] See generally, M Blair and L Stout, ‘A Team Production Theory of Corporate Law’ (1999) 85 Va. L. Rev 247.

[89] For an excellent discussion of this theme see, further, I Ramsay, ‘Consumer Law, Regulatory Capitalism and the ‘New Learning’ in Regulation’ [2006] SydLawRw 2; (2006) 28 Sydney Law Review 9.

[90] Ibid 17.

[91] See generally, J Braithwaite and P Drahos, Global Business Regulation, Cambridge, Cambridge University Press, 2000 at 29-30.

[92] See generally, S Picciotto, ‘Introduction: Reconceptualizing Regulation in the Era of Globalization’ (2002) 29 Journal of Law and Society 1.

[93] As Ramsay (above at p 20) has noted, the ideas of Michael Porter have been influential in bringing about improved international codes of corporate conduct and greater regulatory transparency. Also see: See further, C Parker, ‘Is there a reliable way to evaluate organisational compliance programs ?’, (106-118) in R Johnstone and R Sarre (eds), Regulation: Enforcement and Compliance, Research and Public Policy Series No 57, Canberra, Australian Institute of Criminology, 2004.

[94] See note 23 above.

[95] See generally, C Parker, The Open Corporation: Effective Self-regulation and Democracy, Cambridge, Cambridge University Press, 2002.

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