Submission: Combatting financial abuse perpetrated through coerced directorships

09/01/2025

ARITA has responded to Treasury’s consultation paper on “Combatting financial abuse perpetrated through coerced directorships”.

ARITA acknowledged the serious damage caused by financial abuse and coercive control to victim-survivors, the community and the Australian economy. The challenges arising from financial abuse and coercive control, and the role that coerced directorships play in this context, are well known to ARITA and its members.

ARITA’s key observations and suggestions raised in the submission are:

• Vulnerabilities in the current legislative regime, particularly concerning appointment of directors, may aid and abet coercive control rather than protect against it.
• Use of director identification numbers is a partial response to the challenges of coerced directorships, but the regime needs to be fully implemented, particularly by ensuring the linking of director identification data with the ASIC company register.
• Any definition of “coercive control” should be principles-based, focusing on the effect of the conduct, being actions which undermine an individual’s autonomy or capacity to act, rather than detailing a list of behaviours. Alternatively, including a specific requirement of “consent” in the definition of director for the purposes of the Corporations Act 2001 (Cth) (Corporations Act) may remove the need for inclusion of a specific definition of coercive control in that legislation.
• Further piecemeal reforms to the Corporations Act should be avoided, and matters underlying this Consultation should be considered in the context of a holistic review of the insolvency and corporate governance framework.

 
Read ARITA’s full submission here.