The landmark James Hardie Case in Australia: a wakeup call for non-executive directors

Company directors are not an ornament, but they are an essential component of corporate governance, and vigilant non-executive directors (NEDs) are believed to be crucial to good governance of corporations.' Recent corporate failures in the developed world underscore the need for an active role of private actors such as directors in good governance of corporations. A company in legal concept is an entity created by law conferring artificial personality to represent individuals who operate it for profits or other purposes with perpetuity in its existence and simplicity in its contractual relations. • Corporations emerged as a division of society and gradually changed to an association of individuals: but at present a single person is sufficient to form a company.' Corporations are now the driving force of national economies all over the world, where contemporary society is profoundly dependent on, and affected by, them in one way or another. Hence the regulation of corporations is ultimately part of social governance, and directors' duties, investors' rights and their remedies have become the central concerns of corporate governance.''