Proposals to expand directors’ duties below board level as a result of the HIH Royal Commission recommendations have received mixed reactions from business groups.

The Federal Government’s Corporations and Markets Advisory Committee is currently investigating whether to expand directors’ duties to managers, consultants and contractors, exposing a larger group of people to possible prosecution for misconduct.

The Australian Securities and Investments Commission has made it clear it  “strongly supports” the adoption of an approach that would impose legal duties based on a person’s function – regardless of the job title.

In a submission to the committee, it says those who “take responsibility (and reap the rewards) for making decisions or taking actions on behalf of a corporation that will have significant effects upon it should owe duties to the corporation regardless of their title or employment status”.

However, while directors are generally in favour of the reforms, managers say the changes will see executives deterred from taking some corporate jobs.

Major insurer Promina says there is “no demonstrated need to broaden the obligation of duties to any other person than those currently defined as ‘officer’ under section 9 of the [Corporations] Act”.

In its submission to the inquiry, Promina says the changes expose other employees to liability. “It is significant that there are other laws available which impose liability on individuals below board level, such as the Insurance Act 1973.”

A final report on the committee’s investigation is due next year.