AICD submission on Aged Care Bill 2023 Exposure Draft

The submission focused on the proposed responsible person duty in the Exposure Draft and raised very significant concerns with the duty and its detrimental impact on the governance of aged care providers. Our key points on the responsible person duty were:  

• Australia’s existing statutory and fiduciary directors’ duties provides a comprehensive and clear legal framework that obliges directors to effectively oversee the effective management of aged care providers and the care provided to clients;
• a responsible person duty with civil and criminal liability was not recommended by the Royal Commission and there is no clear policy case for its introduction noting the existing duty frameworks and regulatory tools that are available to promote the provision of quality care. A sector specific directors’ duty, carrying civil and criminal liability, would also be unprecedented in Australian human services industries;
• the proposed criminal and civil liability structure is excessive, unjustified and inconsistent with established principles for when new forms of director liability should be considered;
• the duty will result in very detrimental outcomes through deterring skilled and qualified directors and management from taking on board roles in aged care and as a result, weaken governance practices across the sector;
• the duty will exacerbate the ongoing viability challenges of aged care providers, particularly small and regional NFP providers, including the recruitment of skilled individuals and increasing insurance costs; and
• the framing of the due diligence and ‘reasonable steps’ elements under section 121 of the Exposure Draft do not appropriately reflect the oversight role of directors.