Abstract:
This article examines the law applicable to directors' duty of care in the United States and Australia. In particular, it considers whether a divergence in the "standard of conduct" (that determines how persons should act) and the "standard of review" (the test applied by the authority that reviews such acts) governing the duty of care can be justified. While the recent acceptance in Australia of the United States standard of conduct must be applauded, it is ultimately submitted that the Corporate Economic Reform Program Act's adoption of the United States standard of review, the businessjudgment rule, is inappropriate. It is contended that the divergence ofthe standard of conduct and standard of review lacks justification and that directors should not be subject to a lesser standard of review than "non directors ".
