Middle managers, consultants and people who work below board level could be held accountable for any wrongdoing in company collapses.

The report, issued by the Federal Government’s Corporations and Markets Advisory Committee (CAMAC), respond to recommendations by HIH Royal Commissioner Justice Neville Owen in his report more than three years ago.

CAMAC’s report clarifies the coverage of provisions in the Corporations Act that already impose personal duties and liabilities on people below board level. It is also aimed at taking better account of working arrangements found in companies.

Factors considered include the way in which corporate groups are commonly managed as a single enterprise; the increasing use of independent contractors, consultants and others in corporate functions; and the large part that executives and others play in the running of companies, particularly medium and large operations.

CAMAC Convenor Richard St John, who was Secretary to the HIH Royal Commission, says the recommendations will help fix gaps in the legislation that were uncovered in the HIH collapse.

“The imposition of legal duties on executives and others below board level is not new,” he said. “The recommendations recognise the way in which modern corporations are run, without derogating from the responsibilities of directors or enabling them to avoid their statutory duties.”

CAMAC recommends extending the “care and diligence” and “good faith and proper purpose” laws to directors and any other person who takes part in or is concerned with the management of that corporation.

“This clarification will overcome what appears to have been an inadvertent narrowing in recent years of the class of persons below board level subject to those provisions,” the report said.

It also recommends extending the law dealing with improper use of corporate positions and information to anyone who performs functions for a company.

This is to ensure such people cannot avoid prohibitions designed to protect the interests of a company and its shareholders simply because of not technically being an officer or employee.