Although principles comparable to fiduciary duties for directors have reasonable global application in most jurisdictions, the laws and legal systems of foreign countries may differ markedly from those in Australia.
Directors of corporations operating in foreign countries should seek to ensure that they have a sound understanding of the legal systems in those countries and that the organisation has in place appropriate governance and management systems and processes to meet those legal requirements.
Of note, the duty for a director to act in the best interests of the corporation may vary in some countries to include a more extensive list of beneficiaries of the director’s duties.
Directors of foreign subsidiary companies, and directors of holding companies with subsidiary operations in other countries, should carefully consider and appropriately structure the governance framework and practices under which the corporate group operates.
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