Commonwealth Consolidated Acts Commonwealth Consolidated ActsCare and diligence--officers
(1) An officer of a Commonwealth authority must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she:
(a) were an officer of a Commonwealth authority in the Commonwealth authority's circumstances; and
(b) occupied the office held by, and had the same responsibilities within the Commonwealth authority as, the officer.
Note: This subsection is a civil penalty provision (see Schedule 2).
Business judgment rule
(2) An officer of a Commonwealth authority who makes a business judgment is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if he or she:
(a) makes the judgment in good faith for a proper purpose; and
(b) does not have a material personal interest in the subject matter of the judgment; and
(c) informs himself or herself about the subject matter of the judgment to the extent he or she reasonably believes to be appropriate; and
(d) rationally believes that the judgment is in the best interests of the Commonwealth authority.
The officer's belief that the judgment is in the best interests of the Commonwealth authority is a rational one unless the belief is one that no reasonable person in his or her position would hold.
Note: This subsection only operates in relation to duties under this section and their equivalents at common law or in equity (including the duty of care that arises under the common law principles governing liability for negligence)--it does not operate in relation to duties under any other provision of this Act or under any other laws.
(3) In this section:
"business judgment" means any decision to take or not take action in respect of a matter relevant to the operations of the Commonwealth authority.