Artificial Intelligence – Boards and Corporations – Judicial Guidance
In the recent decision of ASIC v Bekier (Liability Judgment) [2026] FCA 196 (5 March 2026), Justice Lee delivered a judgment regarding director’s duties of Australian directors. It was over 500 pages in length. However, in doing so, Lee J made a number of key observations about AI use by Boards and management in Australia:
• In 2026, recognition must be given to the profound impact of artificial intelligence on corporations and boards. These developments are well summarised in an AICD article: · https://www.aicd.com.au/content/dam/aicd/pdf/tools-resources/director-resources/ai-use-by-directors-and-boards.pdf
• The AICD article repays close reading and explains that Australian boards are cautiously but increasingly experimenting with AI as a governance support tool, shifting the focus from how companies generally oversee AI in their organisations to how AI might assist the directors themselves in the discharge of their duties.
• Current use remains uneven, but many individual directors are using AI informally to prepare for meetings. This is despite collective, board-endorsed use of AI being far from entrenched due, among other things, to confidentiality and legal concerns.
• AI is also no doubt being used by management and company secretaries in the creation of board packs.
• Ultimately, however, directors must be furnished, by whatever means are adopted, with information in a form that is both comprehensive and capable of proper digestion.
• The use of AI-generated summaries as a substitute for the careful reading and interrogation of board materials would warrant caution, not least because inadequately deployed or misdirected AI may increase risk and legal exposure rather than mitigate it.
• There is considerable potential for AI, if appropriately utilised, to assist directors in the discharge of their duties.
• Any use of AI should be controlled and transparent.
• Boards should discuss and deliberately govern any AI use by formal adoption of policies, rather than just wink at informal “shadow” use.
• Chairpersons and company secretaries have a critical role in preserving role boundaries with management and promoting proper director engagement.
• Although ethical reasoning and judgment rests with directors, not machines, AI is already changing the way in which directors receive and analyse material. It is the responsibility of directors to ensure that this occurs in a responsible way, guided by Middleton J’s caution that a board can control the information it receives (applying ASIC v Healey [2011] FCA 717).
• Directors cannot rely upon an inability to cope with the volume of information they receive.
• A director, whether executive or non-executive, is required to take reasonable steps to place themselves in a position to guide and monitor the management of the company, and is expected to take a diligent and intelligent interest in the information available to them, understand that information, and apply an enquiring mind to their responsibilities.
• A way of addressing information overload, at least in part, could be through the principled and transparent use of emergent technology.
• The modalities of reading and examining material in board papers might change, but analysing and understanding information provided by management is a core function of a board; after all, this is the primary way by which directors access the information necessary to make informed, bona fide decisions.
• Directors cannot content themselves by being passive recipients of information.
• An important initial step in taking an intelligent interest in the information relevant to guiding and monitoring management is exercising control and preventing gigantic electronic document dumps masquerading as board packs.
• It is a reality that individual directors are now commonly making use of artificial intelligence to assist them in navigating material provided by management.
• This cannot be politely overlooked. There is nothing inherently objectionable in obtaining such assistance, but what ought not occur is that this development becomes an excuse for a failure to instil discipline in the provision of information to directors or leads to a quiet normalisation of private reliance by them upon computer-generated distillations, unregulated by any agreed policy.
• Proper collective governance requires transparency about how information is being reduced and relied upon in either the preparation of board packs by management, or their digestion by directors.
• The use of technology may assist comprehension, but it cannot displace judgment. The statutory obligation imposed by s 180(1) remains personal, and it requires informed human judgment.
Dr Nigel Wilson, Director, Australis Chambers
Dr Nigel Wilson is an Australian lawyer and privacy, cybersecurity, AI and technology regulatory specialist with over thirty years’ experience.
He also has over thirty years’ experience as a professional workplace trainer and educator for corporations and boards, governments, educational institutions, not-for-profits and national judicial colleges. He was awarded a PhD for his thesis – Regulation in the Information Age – From the Boardroom to the Courtroom.
He is the author of the international, award-winning Teaching Professionals – Revised AI Edition! And was a finalist in the Australian AI Awards 2024 in 3 categories - AI Leader of the Year (SME), AI Consultant of the Year (SME) and AI Academic / Researcher of the Year.
Dr Nigel Wilson, Australis Chambers
LLB (Hons), BEc, BCL Oxford, Cybersecurity Harvard, PhD
wilson@australischambers.com www.australischambers.com 0413 807 585
Liability limited by a scheme approved under the Professional Standards Legislation