A recent High Court decision may lower the threshold for prosecuting corporate executives, potentially leading to an increase in cases holding individuals accountable for corporate misconduct.
This could have far-reaching implications for future corporate and government misconduct cases with a focus on ensuring that those with oversight are held accountable for systemic failures.
Corporate responsibility
The judgement, which stems from a case involving Captain Cook College, endorses the idea that corporate responsibility extends to those in senior management who oversee systems of conduct.
Reasoning in this case could signal a significant shift in how corporations and their leaders are held responsible for misconduct, particularly in instances of systemic or 'unconscionable' business practices.
This ruling broadens the scope of accountability, with corporate officers potentially facing legal consequences even if they were not directly involved in the wrongdoing but had knowledge of it.
The court's decision highlights the role that systems, policies and practices play in corporate behaviour, making it easier to hold individuals responsible if they fail to address unethical practices.
Increased scrutiny of executives
Legal experts suggest this could lead to increased scrutiny of executives and directors, particularly in industries with complex organisational structures, where identifying specific wrongdoing has historically been difficult.
The case concerned Captain Cook College, which the Australian Competition and Consumer Commission (ACCC) accused of engaging in systemic unconscionable conduct by misleading students into enrolling in courses that offered little vocational benefit.
The High Court dismissed the college’s appeal, affirming that the company's profit-driven enrolment practices had harmed students and the public.
The ruling is being hailed as a landmark decision, setting a precedent for future cases that may involve complex corporate or government systems and potentially increasing the liability of executives overseeing such operations.