Many of the most severe penalties for directors come from the Competition and Consumer Act 2010 (Cth), which prevents companies from acting in ways that are considered “uncompetitive”, the idea being that competition within the market benefits consumers. Similarly cartel conduct (i.e. industry price fixing) is also prohibited. A contravention of the duty of good faith or the improper use of their position, or information gained as a result of holding that position, any dishonest or reckless conduct can result in imprisonment for five (5) years.
In addition to the criminal sanctions, any contraventions of directors duties may also result in substantial fines. Shareholders and creditors may similarly take action against breaching directors. If a director is brought to the attention of ASIC or the Courts, they may face the prospects of disqualification from acting in the role of director in the future. Reputational damage can also be significant.