June 2026

When asked about this Judgement, Scott Freidman, Director of Harris Freidman Lawyers says it plainly, “There is a moment in almost every major governance failure where, in hindsight, someone knew something they did not say. A report was softened. An email was not forwarded. A question was not asked.”  The results of which, clearly, can be catastrophic.

The judgment handed down by Justice Michael Lee on 5 March 2026 in ASIC v Bekier (Liability Judgment) [2026] FCA 196 is, at its core, a forensic examination of exactly that moment replicated across years, across meetings, across hundreds of pages of board materials at one of Australia’s largest casino operators.

At nearly 500 pages and 1,959 paragraphs, it is, as ASIC Chair Joe Longo described it, “probably the most significant corporate governance case we have taken in my time at ASIC.” It has already prompted relief in some boardrooms, disquiet in others, and a great deal of commentary from lawyers, governance professionals and journalists across the country. But commentary, however well-informed, is not the same as the judgment itself.

“The Federal Court’s Star Entertainment decision has become a key corporate governance case for non-executive directors. The case provides several practical lessons for directors in relation to their duty of care obligations, including making proper inquiries, critically assessing management information and being responsible for risk culture”, says Niall Coburn, Barrister and Legal writer.

Ginette Muller, Principal of GM Advisory makes the point just as plainly: professionals need to read the judgment, not just the summaries. The texture of His Honour’s reasoning, the careful distinctions he draws, and the warnings embedded in findings that ultimately favour the defendants: these do not compress well. The nuance is in the detail, and the detail repays the effort.


What was actually decided

ASIC brought civil penalty proceedings against eleven former directors and officers of The Star Entertainment Group, alleging failures in the management of money laundering risks connected to Asian gambling junkets, most significantly Suncity, and misleading communications to National Australia Bank regarding the use of China UnionPay cards.

Former CEO Matthias Bekier and former Chief Legal and Risk Officer Paula Martin were found to have contravened s 180(1) of the Corporations Act, the statutory duty of care and diligence. Seven non-executive directors were not. Two officers, the former CFO and former Chief Casino Officer, had settled prior to trial, admitting breaches and accepting disqualification.

The outcome for the non-executive directors was, in the formal legal sense, a vindication. But Justice Lee’s language in reaching that conclusion was anything but congratulatory. The board, he observed, was “not a portrait of directors actively pressing management with difficult questions as to whether the business was being conducted ethically, lawfully, and to the highest available standard.” The non-executives succeeded, in significant part, because management had failed to give them the information they needed and because they declined to give evidence, a forensic choice His Honour noted was ultimately vindicated.


The line between executive and board

The most practically significant aspect of the judgment is what it says about the distinction between executive and non-executive responsibility and where that line sits.

John Morgan, Principal of BCR Advisory, President of the Association of Independent Insolvency Practitioners (AIIP), observes that the judgment gives real and practical guidance to directors in executive roles about the weight of their obligations. For executives, the message is unambiguous: you sit at the intersection of management and the board, and you bear a heightened responsibility to ensure that what reaches the board is complete, accurate, and properly flags the severity of what management knows. Where Mr Bekier possessed information indicating that risks were higher than the board papers suggested, Justice Lee found he was obliged to say so and his failure to do so was a contravention of his duty.

The non-executive directors, by contrast, were entitled to rely on management to surface risks unless there was reason to doubt management’s honesty, trustworthiness or competence. The Court found that management had engaged in what was described elsewhere in the commentary as a “dramatic understatement” of the risks in materials provided to the board. Because the information the non-executives received was insufficient to trigger reasonable inquiry, they were not found to be in breach for failing to act on what they did not know.

This creates a conceptual tension that Justice Lee acknowledged openly. ASIC simultaneously alleged that executives failed to properly inform the board, and that non-executives failed to notice the deficiency. If the first allegation succeeds, the second becomes very difficult to sustain. That tension was ultimately decisive.


Information overload — and what it does not excuse

One of the judgment’s most widely quoted observations concerns the state of modern board governance. Board packs at Star ran to hundreds of pages, sometimes provided minutes before meetings with executive summaries, summaries of those summaries, detailed papers, appendices and technical attachments. Justice Lee did not accept this as an excuse for disengagement. Directors, he said, cannot rely on an inability to cope with the volume of information they receive.

But he also acknowledged the reality: “No rational person can evaluate all this material meaningfully in the time available, let alone do so repeatedly, meeting after meeting.” ASIC v Bekier (Liability Judgment) [2026] FCA 196, Lee J.

James Flaherty of GM Advisory and Convenor of the Insolve Panel, raises a question that deserves serious consideration: is the volume of material a symptom of something deeper? If non-executive directors are sitting on multiple boards simultaneously, as many prominent directors do, are we genuinely surprised that no one is reading everything? Is the answer better board packs, or is it a broader conversation about how governance talent is deployed, and whether the concentration of directorial roles in a relatively small pool is itself a structural risk?

Justice Lee, notably, suggested that artificial intelligence may legitimately assist directors in processing large volumes of board material but only if its use is transparent, governed by formal board policy, and does not substitute for genuine engagement. AI used informally and without oversight, he warned, could increase rather than reduce legal exposure.


What remains unsettled

For all its length and care, the judgment leaves questions that practitioners across the accounting, legal and advisory professions will be working through for some time.

What does “active engagement” actually require of a non-executive director sitting on the board of a regulated, high-risk enterprise and how does that differ from a director of a lower-risk business? Where does the duty to inquire begin, when management has not flagged a concern? How should in-house counsel who hold officer roles manage the tension between their legal advisory function and their governance obligations? And how should boards think about AI as a governance tool, not in principle, but in practice?

These are not abstract questions. These are the questions that directors, lawyers and accountants across Australia are asking themselves right now, in the wake of a judgment that confirmed the law is settled while leaving much of its application deeply contested.


Why this matters in Kuala Lumpur in September

The BCR Advisory and Harris Freidman Lawyers Conference, held in association with GM Advisory, is clearly a challenge for thinking professionals to grasp the chance to test their thinking away from the everyday.  Each of these firms are industry leaders, led by respected leaders who are listened to. Convenors John Morgan and Scott Freidman both felt the need to link professionals not only to the Judge, but key legal minds in a space, away from the noise of work and home.  KL, Asia’s new industry hub, provides us a place where professionals will have a few days to think carefully, challenge assumptions, and hear from those closest to the issues.

Justice Lee will join delegates as Keynote Speaker, but as part of the program as an active part of the conference. His Honour has a rare combination of deep technical authority and a demonstrated willingness to engage with the practical realities of modern governance including, as the judgment itself makes clear, the emerging role of technology, the problem of information overload, and the human dimensions of decision-making under pressure.

The conference program addresses many of the themes the judgment raises directly: class actions, forensic reporting, professional practice challenges, stakeholder disputes, and the use of AI. The judgment does not resolve those themes. It sharpens them.

If you work in a profession that advises, governs or accounts for organisations of consequence this is the conversation you need to be part of.

The BCR Advisory | Harris Freidman Lawyers Kuala Lumpur Conference

 23–25 September 2026 at the Shangri-La Hotel, Kuala Lumpur. 

For registration and enquiries, contact Jenny Watson at david&GOLIATH Event Management: kl@dgem.com.au

*Citation: Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196, Lee J, 5 March 2026. Commentary drawn from Ashurst (17 March 2026), Australian Financial Review (5 March 2026, 12 March 2026, 27 March 2026) and Wotton Kearney (March 2026).*