Forty Years of Director and Officer Penalties in Australia: What the Evidence Really Shows
Forty Years of Director and Officer Penalties in Australia: What the Evidence Really Shows
David Cantrick-Brooks | 29/07/2026

More enforcement and higher statutory ceilings are clear; a rise in underlying misconduct is not

By David Cantrick-Brooks, Principal and Director, Governance in Action Pty Ltd

The penalties imposed on former Star Entertainment executives Mathias Bekier and Paula Martin in June 2026 provide a timely reminder that serious governance failures can carry substantial personal consequences. Mr Bekier was ordered to pay A$700,000 and was disqualified from managing corporations for six years. Ms Martin was ordered to pay A$400,000 and was disqualified for seven years. Both were also ordered to pay 45 per cent of ASIC’s costs. The Court had previously found breaches of duty connected with the handling of money-laundering and criminal-activity risks.

Those outcomes invite a broader question: have Australian directors and officers become more likely to engage in serious misconduct, and have the sanctions imposed on them become materially harsher over the four financial decades from 1 July 1986 to 30 June 2026?

The most defensible answer is nuanced. Enforcement activity and statutory penalty ceilings have increased markedly. Aggregate civil penalties obtained by ASIC have also risen, particularly in recent years. But the available public data does not establish that the underlying incidence of serious misconduct by directors and officers has increased. Nor does it prove that higher penalties, by themselves, have reduced misconduct.

A measurement problem before a misconduct problem

The first difficulty is definitional. “Serious misconduct” can include negligent oversight, breach of care and diligence, misuse of position or information, dishonesty, insolvent trading, defective disclosure, market misconduct, financial-services misconduct, consumer harm, bribery, fraud and criminal offending. These categories involve different legal tests, mental elements and consequences. A single count of “cases” can therefore compare unlike conduct.

The second difficulty is scope. Court-imposed pecuniary penalties are only one part of the enforcement picture. Disqualification, imprisonment, compensation, disgorgement, costs orders, enforceable undertakings and administrative banning action may be more important in some matters. A dataset confined to superior-court judgments will also omit lower-court criminal proceedings and administrative action, while a dataset based only on ASIC media releases may not capture every matter consistently.

Timing creates a further distortion. Misconduct may occur years before a final judgment. A major Australian study of directors’ duties enforcement found average periods of approximately 6.9 years for civil matters and 7.9 years for criminal matters from the earliest contravention to final superior-court determination. A spike in judgments can therefore reflect earlier conduct, investigative timing, litigation strategy or appeal delay – not a sudden deterioration in boardroom behaviour.

What the best available studies show

The strongest director-specific empirical study located for this review examined finalised public enforcement of directors’ duties from 2005 to 2014. It identified 99 matters: 27 civil matters involving 78 defendants and 72 criminal matters involving 83 defendants. Of those matters, 87 resulted in proven contraventions or offences, involving 142 liable defendants.

The sanctions were not predominantly financial. The study identified 43 custodial outcomes involving a minimum period of incarceration, 63 civil disqualifications and at least 191 administrative disqualifications under the statutory banning power then examined. It recorded 34 civil pecuniary penalties and only four criminal fines. This supports an important proposition: for individuals, incapacitative and liberty-related sanctions have historically been central to public enforcement, while monetary penalties have been only one component of the sanction bundle.

For the 27 directors’ duties matters in which civil pecuniary penalties were analysed, the average penalty was about A$115,593 and the median was A$50,000. Matters involving a single contravention averaged A$25,000; matters involving multiple contraventions averaged about A$177,875. These historical outcomes were well below the then-available aggregate maxima in many cases, although comparisons must account for the number and seriousness of contraventions, cooperation, admissions, loss, benefit, prior conduct and the total package of orders.

A clear increase in civil enforcement – but mostly against companies

A later empirical study examined all ASIC civil penalty actions finalised between 2013 and 2022. Its scope was broader than directors’ duties and included corporate and financial-services misconduct. It found 159 finalised actions, with 81 per cent completed between 2017 and 2022 and 52 per cent in the three years from 2020 to 2022. That is persuasive evidence of increased civil-enforcement activity, although not necessarily of increased underlying misconduct.

The same study recorded A$604.56 million in total civil penalties. Only A$8.68 million – about 1.4 per cent – was imposed on individuals; approximately A$595.88 million was imposed on companies. This distinction is critical. Headline ASIC penalty totals are not a proxy for the penalties imposed personally on directors and officers.

The official ASIC totals reinforce the system-wide trend. ASIC reported court-ordered civil penalties of A$24.9 million in 2019–20, A$189.4 million in 2020–21, A$229.9 million in 2021–22, A$185.4 million in 2022–23, A$90.8 million in 2023–24, A$104.1 million in 2024–25 and a record A$830 million in 2025–26. These figures demonstrate the scale and volatility of enforcement outcomes across ASIC’s jurisdiction. They do not show that directors and officers personally paid those amounts; the record 2025–26 figure was driven by orders against major banks, superannuation trustees, market participants and financial-services firms.

The 2019 reforms changed the penalty architecture

Any long-run analysis must treat 2019 as a structural break. The Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019 materially increased civil and criminal penalty settings. By 30 June 2026, the fixed limb of the maximum civil penalty for an individual under section 1317G of the Corporations Act was 5,000 penalty units – A$1.65 million at the then Commonwealth penalty-unit value – or, if greater, three times the benefit derived or detriment avoided. For a corporation, the maximum used higher fixed, benefit-based and turnover-based limbs.

The reforms created greater capacity for proportionality, profit-stripping and deterrence. They also mean that nominal penalties before and after 2019 are not directly comparable. Inflation adjustment is necessary but insufficient: researchers must also control for altered statutory maxima, multiple contraventions, the seriousness and duration of conduct, benefits obtained, loss caused and whether the respondent was an individual or a corporation.

Has serious misconduct increased?

The evidence reviewed does not justify that conclusion. More proceedings may reflect more misconduct, but they may also reflect better detection, stronger whistleblowing and complaints, expanded regulation, larger regulated populations, improved data analytics, post-royal-commission priorities, greater regulatory resources, more assertive litigation strategies or delayed resolution of older matters. The number of registered companies has also grown, so raw matter counts should be normalised against an appropriate denominator.

Claims that misconduct has risen because of declining morals, greed, hubris, US-style remuneration or an excessive focus on short-term profit are plausible hypotheses – not established findings. They should be tested against evidence about incentives, culture, tenure, control failures, board challenge, speak-up mechanisms and enforcement probability. A thought-leading analysis should resist turning intuitively attractive explanations into asserted causes.

Do higher penalties deter misconduct?

The public data does not permit a reliable causal answer. Deterrence depends not only on the maximum sanction but also on the perceived likelihood of detection, investigation, prosecution and timely judgment. A severe penalty imposed many years after conduct may have less general deterrent effect than a credible, visible and prompt enforcement system. For individuals, disqualification, imprisonment, compensation, costs and reputational damage may exert more influence than the pecuniary penalty alone.

The Star outcomes are significant because they combine substantial personal penalties with lengthy disqualifications and costs exposure. They reinforce the expectation that senior executives must identify, escalate and manage serious non-financial risks. They do not, standing alone, prove that courts have adopted a uniformly harsher tariff across all categories of director and officer misconduct.

What boards should take from the evidence

The practical lesson is not to focus narrowly on whether the next penalty will simply be another ‘speeding fine’ or ‘parking ticket’, which demands a larger payment. Boards should reduce the conditions in which serious misconduct can persist: unrealistic targets; incentives that reward boundary-pushing; weak escalation; poor-quality information; under-resourced risk, compliance and internal audit functions; inadequate challenge; normalisation of deviance; and tolerance of high performers who disregard expected standards.Complacency can have severe consequences.

Education remains important, but knowledge of legal duties is not enough. Effective deterrence inside an organisation requires clear accountability, psychologically safe escalation, credible consequences, disciplined remuneration governance, reliable assurance, accurate minutes and evidence that the board responded to warning signs. Regulators, for their part, need sufficient capability to detect and pursue serious misconduct promptly and consistently.

Conclusion

Over the four decades to 30 June 2026, Australia moved from a system relying heavily on criminal prosecution and compensatory remedies to a more flexible civil-penalty regime with substantially higher statutory ceilings. Civil enforcement activity and aggregate penalties have increased, especially since the late 2010s. Yet the evidence does not establish a corresponding rise in the underlying rate of serious director and officer misconduct, and company penalties dominate the headline totals.

The sound conclusion is therefore narrower – but more useful. Australia has developed a stronger enforcement toolkit and is using it more actively. Whether that toolkit is sufficiently swift, certain and personally consequential to prevent misconduct remains an open empirical question. The next step is not speculation: it is a properly coded, case-level dataset that separates people from entities, conduct dates from judgment dates, and monetary penalties from the full sanction package.

AI-assisted tools and techniques were used here to support the research, drafting and editing of this publication. Responsibility for the final content rests with David Cantrick-Brooks.

Author’s note: This article is a governance analysis, not legal advice. Figures are based on the cited public sources and should be rechecked immediately before publication for appeals, corrections or updated regulatory data.

What Now?

The scarcity and inconsistency of the public data are themselves significant findings. They reveal a gap between the importance of director and officer accountability and the availability of sufficiently granular, longitudinal evidence to assess whether enforcement settings are working as intended.

The article therefore serves two purposes:

Provides a careful, evidence-based account of what can presently be concluded, without conflating corporate penalties, individual penalties, enforcement activity and the underlying incidence of misconduct.

Issues a constructive challenge to the institutions best placed to advance the analysis – legal academics, regulators, major law firms, professional bodies and D&O insurers – to develop more comprehensive datasets covering matters such as:

That positioning strengthens rather than weakens the article. It avoids claiming more than the available evidence supports, while establishing a credible framework that others can test, refine and expand. In that sense, the article is not merely an analysis of historical penalties; it is also a well-founded case for better transparency, data collection and empirical research into corporate misconduct and enforcement in Australia.

Resources

The principal resources used in producing this article are listed below.

1. Hedges, Bird, Gilligan, Godwin & Ramsay, ‘The Policy and Practice of Enforcement of Directors’ Duties by Statutory Agencies in Australia: An Empirical Analysis’ (2017) 40 Melbourne University Law Review
https://law.unimelb.edu.au/__data/assets/pdf_file/0005/2494283/06-Hedges-et-al.pdf

2. Ramsay & Webster, ‘An Analysis of the Use of Civil Penalties by the Australian Securities and Investments Commission’ (2025)
https://www.cambridge.org/core/services/aop-cambridge-core/content/view/CC192EBB49CD89564C184D699934096A/S0067205X25100082a.pdf/an_analysis_of_the_use_of_civil_penalties_by_the_australian_securities_and_investments_commission.pdf

3. ASIC Report 387, Penalties for corporate wrongdoing (March 2014)
https://download.asic.gov.au/media/q43iuydv/rep387-published-20-march-2014-redacted-20220926.pdf

4. Corporations Act 2001 (Cth), current compilation at 1 July 2026, including s 1317G
https://www.legislation.gov.au/C2004A00818/2026-07-01/text

5. Crimes Act 1914 (Cth), s 4AA penalty unit
https://www.legislation.gov.au/C1914A00012/2026-01-22/text

6. Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Act 2019
https://www.legislation.gov.au/C2019A00010/latest/text

7. ASIC 26-123MR: Former Star Entertainment executives Mathias Bekier and Paula Martin disqualified and ordered to pay penalties
https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2026-releases/26-123mr-former-star-entertainment-executives-mathias-bekier-and-paula-martin-disqualified-and-ordered-to-pay-penalties/

8. ASIC 26-162MR: ASIC secures record A$830 million in civil penalties orders in 2025–26
https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2026-releases/26-162mr-asic-secures-record-830-million-in-civil-penalties-orders-and-644-million-back-to-australians-in-2025-26/

9. ASIC annual reports
https://www.asic.gov.au/about-asic/corporate-publications/asic-annual-reports/

10. ABS, Consumer Price Index, Australia
https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release

11. Hamilton v Whitehead [1988] HCA 65
https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1988/65.html

12. Original Governance in Action research prompt
AI Prompt for Creating Draft Article and LinkedIn Post on Fines and Penalties (PDF v1.0), supplied by David Cantrick-Brooks

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