11.9 Indemnities for GOCs

Section 138 of the GOC Act provides that a statutory GOC must not indemnify or exempt a person who is or has been an officer of the GOC against a liability incurred as an officer. However, the statutory GOC may indemnify a person against a civil liability which did not arise out of conduct involving a lack of good faith and for liability for costs and expenses incurred by the person in successfully defending a proceeding, whether civil or criminal.

This indemnity may only be given with the prior approval of the shareholding Ministers.

In respect of company GOCs, section 199A of the Corporations Act 2001 (external link) provides that a company must not indemnify a person who is an officer of the company against a liability to the company incurred by the person in that capacity. A memorandum or articles or any other instrument or any agreement or arrangement that attempts to do this is void. Protection in these respects is a matter for Directors' and Officers' insurance. However, the Corporations Act 2001 (external link) does not prevent the company from indemnifying an officer for a liability to a third party unless the liability arises out of conduct involving a lack of good faith.

Further, section 199A does not prevent a person being indemnified by the company in respect of the costs of successfully defending criminal or civil proceedings. The common law prohibition on a company indemnifying its officers against criminal liability remains.

Last reviewed: 17 July, 2009

Last updated: 22 July, 2009

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