The Federal Court’s decision in ASIC v Bekier & Ors [2026] FCA 196 has focused attention on how Australian courts are applying the statutory duty of care and diligence to boards, senior executives, and in‑house counsel and its implications for directors’ and officers’ (D&O) exposures. In commentary for Lockton, Grace Monaco, national professional and executive risk claims manager, described the ruling as a “useful illustration of the roles and responsibilities between management and non-executive directors and the factors that will be considered by the Courts when determining liability.”
The case, brought by ASIC against 11 former directors and officers of The Star Entertainment Group Limited, centred on alleged failures to respond to money‑laundering, legal, and regulatory risks linked to junket operators and the use of bank cards for gambling. Two senior executives – the former chief financial officer and chief casino officer – admitted contraventions of section 180(1) of the Corporations Act 2001 (Cth) and resolved the proceedings before trial, resulting in civil penalties and periods of disqualification. ASIC is now pursuing penalties and disqualification orders against the former CEO/managing director and the former group general counsel/company secretary. The chief casino officer received a $180,000 penalty and 18‑month disqualification; the former CFO was fined $60,000 and disqualified for nine months.
At trial, ASIC alleged that the CEO/managing director and group general counsel/company secretary failed to identify, act on, and adequately escalate clear legal and regulatory risks to the board. The court held that the CEO/managing director possessed information that would have led a reasonably competent person in his position to recognise reasonably foreseeable legal and regulatory risks. In those circumstances, he should have informed the board and recommended suspending relationships with certain junket operators.
The court’s findings against the group general counsel and joint company secretary focused on involvement in the provision of misleading information to a bank, failure to recognise and escalate red flags, and withholding or downplaying material information when briefing the board. The court did not treat her role as general counsel, reporting into management, as distinct from her status as an officer and company secretary. Her officer role was informed by her position as chief legal practitioner of the company, and she was therefore accountable to the board for raising material legal and compliance issues. It was not solely a matter for the CEO to determine what issues were taken to the board.
ASIC’s case against the non-executive directors focused on whether they applied sufficient scrutiny to information from management and whether they should have taken steps, including suspending junket relationships. On the evidence, the court found that ASIC had not established breaches of section 180(1) by any non-executive director. The board had not been given key information, and the material that did reach the board did not indicate that there was a material risk or that further enquiry was required. At the same time, the court noted that the records did not show sustained questioning of management or sustained probing of risk issues. While those observations did not result in liability on the pleaded case, they indicate an expectation that boards demonstrate ongoing oversight in their records.
The judgment reiterated that “a director, whether executive or non-executive, is required to take reasonable steps to place themselves in a position to guide and monitor the management of the company and is expected to take a diligent and intelligent interest in the information available to them, understand that information, and apply an enquiring mind to their responsibilities.” Section 180(1) operates as an objective, contextual standard. The benchmark is what an ordinary person with the director or officer’s knowledge and experience would have done in the circumstances, so particular skills and experience shape the content of the duty.
For insurers and corporate legal teams, the court’s approach to the general counsel provides insight into how in‑house lawyers with officer roles may be assessed. Monaco observed that a solicitor and general counsel who is also an officer must consider their “wholistic role and responsibilities, including their professional and ethical obligations as a legal practitioner.” That role extends to using legal expertise to recognise regulatory and compliance risks and to ensure the board is informed about matters relevant to risk. The decision indicates that courts will look at whether in‑house counsel who hold officer roles not only provide legal analysis but also appropriately escalate and frame risk information for the board.
The themes in ASIC v Bekier are consistent with ASIC’s broader guidance on company officeholders. ASIC describes directors and secretaries as responsible for ensuring the company operates in its best interests, complies with applicable laws, maintains proper records, remains able to pay debts when due, and meets ASIC’s reporting and filing requirements. Officeholders can face civil and criminal penalties, including fines, imprisonment, and disqualification, even where they did not intend to breach their duties.
Non-executive directors are entitled to rely on information and advice from management, but the judgment emphasises that such reliance must involve active engagement. The court noted that their duties “can require a willingness to interrogate, to probe, and, where necessary, to challenge.” Boards are also expected to structure information flows so that directors receive material in a digestible form and cannot rely on information overload as a defence; directors remain responsible for analysing and understanding the information they receive.
ASIC v Bekier is an example of recent judicial reasoning on:
For insured entities, the decision indicates the need for clear escalation pathways for legal and regulatory issues, contemporaneous records of board challenge and oversight, and defined expectations for legal and compliance functions. As ASIC pursues further penalties and disqualification orders against the former CEO and general counsel, the case is expected to continue to be cited in coverage discussions, risk assessments, and board governance programs across the Australian insurance market.
