Risks

To minimise the risk that the integrity and effectiveness of the corporate structure are undermined, directors of holding companies and subsidiaries need to be aware of the duties that they must fulfil in respect of their companies. Failure to comply with the duties imposed by statute and common law can result in the directors facing a number of potential liabilities, including criminal and civil penalties and personal liability.

Directors who are on the board of a company within a corporate structure are typically exposed to more risks than directors who are on the board of a single stand-alone company and particularly where they are at risk of being considered de facto directors of another company within the corporate structure. Further, directors who are on the board of the holding company and a subsidiary, or the boards of two or more subsidiaries, would have a more onerous task of discharging multiple sets of duties in respect of all of their companies.

See Risks.