Matters and crises of conscience in contemporary commercial lawyering

By Professor Bryan Horrigan


The intersections between business, law, morality, and ethics, in regulating and practising an informed business and professional conscience, are intersections that are timeless, fundamental, and suddenly topical again.[i] Various matters and crises of conscience in contemporary commercial lawyering illuminate the need for commercial courts, regulators, and lawyers, and their business clients, to adjust to a new and emerging reality about such intersections.

Business-related law and regulation uses ethical and moral concepts, and must be applied and practised in circumstances that raise ethical and moral issues as well. Accordingly, ethics and morality are mainstream boardroom-level concerns, for companies in the private and public sectors, as well as for professional services firms, not-for-profit boards, and even university councils.

We are well beyond the point of an organisation’s ethicality being compartmentalised away, delegated to any one corporate organ or official, treated as peripheral to core strategic and operational concerns, or otherwise marginalised, deprioritised, or non-integrated in organisational DNA. Some topical examples are canvassed below.

Clear thinking about commercial law, ethics, and morality

Australian courts sometimes refer to ‘commercial morality’, the public interest(s), and community values and expectations as relevant reference points in their judgments, all of which can involve the internalisation of ethical, moral, and acceptable ‘policy’ considerations in legal reasoning and adjudication about the law.[ii] Judges at the highest level recognise the intermingling of law, ethics, and morality that is as crucial in the design of commercial laws as it is in their operation and the practices surrounding them in the public, private, and community sectors.

‘There is an obvious tension between the drive for profit and competitive advantage which is at the heart of the market economy, and conscience-based regulation which calls for ethical self-awareness, restraint and sensitivity to the customer’s potential vulnerability or disadvantage’, according to Justice Chris Maxwell[iii] in his influential Victoria Law Foundation Oration in 2019.[iv] Similarly, according to Chief Justice James Allsop[v] in the same year, ‘many of the commercial problems of corporate and financial regulation exposed in the recent [Hayne] Royal Commission would be made more ruthlessly manageable by a full understanding and a daily application of the fiduciary principle, rather than by ever more detailed regulation which has as its (false) working assumption the ability exhaustively to define good faith, fiduciary responsibility, and behaviour in good commercial conscience.’[vi]

Any boardroom-level decision about an organisation’s best interests, within the given parameters of the law and the marketplace, requires a holistic and integrated approach to corporate governance and its various socio-ethical, eco-environmental, and politico-regulatory dimensions. Well-governed successful organisations are financially, legally, socially, ethically, and environmentally responsible ones. A company’s ethicality is just as relevant to its corporate reputation as its profitability.

In terms of awareness-raising about matters and crises of conscience, they take a variety of forms and operate on multiple levels of analysis in legal and regulatory contexts. A company and its board members, and the company’s internal and external advisers, might confront ethics and morality individually,[vii] organisationally,[viii] professionally,[ix] substantively,[x]and society-wide.[xi]

In particular, companies and their boards and advisers risk miscomprehending or underestimating the full reach and potential of significant and emerging areas of legal and regulatory reform, if they do not pay sufficient attention to the precise interplay of morality,[xii] ethics,[xiii] regulation,[xiv] and law.[xv] Choices between values and interests underlie all legal text, from international conventions, customary law, and national constitutions to legislation, precedent, and contracts. In that sense, the inherently value-laden nature of the law internalises ethical and moral considerations in legal design, interpretation, and application of both enacted and judge-made law, including commercially relevant areas of law such as corporate, competition, consumer, contract, and financial services law.

As examples simply from legislation, consider provisions across the Commonwealth statute book that incorporate notions of fairness and reasonableness, impose obligations of good faith, prohibit unfair contract terms, proscribe unconscionable business conduct towards other businesses and consumers, and require financial services to be delivered ‘efficiently, honestly and fairly’. Many of those areas of conscience-infused law are the subject of current Australian Government inquiries, law reform scrutiny, and ongoing judicial test cases. In addition to compliance with explicitly conscience-infused areas of law, companies and their boards risk compounding any unethical institutional and individual behaviour with increased risk of legal non-compliance, criminality, or other illegality, because organisational cultures and corporate governance arrangements whose deficiencies facilitate unethical behaviour are breeding grounds for unlawfulness too.

Moreover, the conditions of deficient corporate cultures that make unfair, unethical and unlawful behaviour by companies more and not less likely also increase the risk of ‘stepping stones’ liability for company directors and other corporate officials for facilitating breaches of law by their companies, as illustrated by the number of actions brought by ASIC under that umbrella, with potential beyond the preponderance of actions for misleading conduct.[xvi] At the same time, there are limits on anyone who exercises public power[xvii] or even corporate power[xviii] simply acting upon their own personal consciences, detached from their roles and responsibilities under the law. After all, we must be careful to avoid what high-level judges have labelled ‘the formless void of individual moral opinion’.[xix]

Clearer thinking than what emerges from much political and social media commentary about the legal and moral dimensions of controversial business topics in the news[xx] is needed to grapple with the multi-layered interactions between legal, regulatory, moral, and ethical concerns for business. If one of the business cases for CSR is that doing good for society is good for business too, the corollary is that being good is also good for business, fair marketplaces, and societal well-being, thereby reducing pressures to ratchet up regulation to promote lawful, ethical, and otherwise socially responsible business behaviour.

None of this unavoidable engagement by business and its legal advisers with ethics and morality is truly capable of being deflected away as legal and business thought leaders pandering to those aspects of the so-called ‘court of public opinion’ that are manifested in populism, opinion polls, op-eds, news soundbites, and public criticism and anti-intellectualism. The standards of public reason, common morality, and other value-infused norms concerning the law rise above that level of discourse in a deliberative democracy underpinned by popular sovereignty, with multiple mechanisms to ensure reasoned institutional and organisational decision-making, explanatory accountability to the community as a whole, informed and fair markets, and engagement in the broader marketplace of ideas, under what has been characterised in public law as societal conditions of a ‘culture of justification’.[xxi]

Commercially and ethically contextualised client advice

The common claim that lawyers give legal and not commercial advice to clients is better understood as a more discrete claim that lawyers do and should give legal advice to clients that is properly sensitive to its underlying commercial context and reality. Similarly, the equally common claim that lawyers give legal and not moral advice to clients is more properly understood as a more nuanced claim that legal advice to commercial clients must still be properly sensitive to the surrounding environment of reputational drivers, business ethics, socio-environmental standard-setting, ‘commercial morality’, societal values and expectations, and conscience-infused elements of the law.

All of those contextual matters are in scope to inform the reactions of those who provide professional advice, enforce or interpret commercial laws, and operate under or benefit from them. Wherever the outer boundaries lie for proper professional advice, can any commercial lawyer safely ignore or downplay elements of integrity and ‘good conscience’ in the law, business ethics, realistic customer and politico-regulatory reactions, broader stakeholder impacts, and other dimensions of reputational, financial, and social risk, in framing and giving holistic advice to commercial clients? Of course, the occasions and likelihood of legally relevant socio-ethical risks for companies, from within the law and its surrounding context, and their appropriateness as matters within or out of scope for a company’s internal and external advisers’ consideration and advice, are often matters upon which reasonable minds can differ.

The Crown Melbourne Royal Commissioner, Ray Finkelstein, indicated in his October 2021 report, for example, that surrounding context and circumstances might extend an in-house or external lawyer’s role beyond simply advising ‘on what the law is’, at least where ‘the client/employer is a regulated entity that must remain of good repute, having regard to its “character, honesty and integrity”’.[xxii] In that context, ethics and morality are engaged in the content of the law and the nature of the evaluation required by the law in conferring, retaining, or losing the benefit of the privilege of holding a relevant business licence or registration. The mix of legal, professional, ethical, moral, and other societal elements involved in setting the proper scope and limits of legal advice in such contexts is clearly a contestable area of discourse, and one in which clarity and precision of analysis and boundary-setting is crucial, from the early stage of retaining and briefing lawyers to the end-stage of reviewing and acting upon their advice.

To give a different example about rethinking the boundaries of client-focused advice, one judicial commentator has extra-judicially associated ‘rule of law’ concerns with various issues surrounding the political and legal saga involving former Commonwealth Attorney-General, Christian Porter, which also raises issues about lawyers resisting improper public and popular pressure. Editorialising in The Australian Law Journal earlier in 2001, Justice Francois Kunc considered various professional aspects of the incident in which a major law firm faced internal and external criticism for taking on Christian Porter as a client, and without following processes and canvassing views to the extent desired by some insiders and commentators. The incident resulted in the departure of the firm’s CEO, shortly after the CEO circulated a message to the firm’s staff about the processes involved in making that decision.

Considered through the lens of ethicality, what might make sense on one ethical dimension might compete with what makes sense on another ethical dimension. Here, depending upon the governance arrangements surrounding such decisions, what might be possible in terms of consulting and giving a voice to the legitimate concerns of affected stakeholders, all within the proper boundaries of respecting the range and limits of consultation-rights and decision-rights within a law firm, might or might not conflict with the obligations of lawyers to ensure that everybody can exercise their right to adequate legal representation of their choice, regardless of what others think about them, what they are alleged to have done, or how their status as a client might affect the firm’s reputation. Once again, clear thinking and framework-setting are essential steps towards resolution of the mix of legal, ethical, moral, and other interests engaged, especially where there are competing considerations even of the same kind, such as the two equally important but competing equitable considerations in that case.

In his editorial, Justice Kunc rightly condemned any suggestion that lawyers should not act for unpopular causes or people. Limited to that context, his comments were also correct about a law firm not having any kind of ‘social licence’ from the community that would in any way improperly impinge upon the firm’s capacity to take on prospective clients, and thereby deny them access to justice in terms of the legal advisers of their choice. However, even allowing for the circumstance of extra-judicial editorial hyperbole, he perhaps went too far in stating outright that the concept of a ‘social licence’ cannot ‘be applied to law firms’ and ‘has no place in relation to the practice of the law’.[xxiii]

The broader point of those examples for the present discussion is as follows. Lawyers in all branches of the legal profession who are considering their interwoven responsibilities to clients, the administration of justice, society at large, and the rule of law need to separate the good from the bad in public and professional contestation of values and interests, and in gauging whether they are legally relevant in terms of what is in and out of scope for the purposes of professional instructions and advice. As demonstrated and illustrated throughout this article, that exercise engages ethical, moral, and legal reflection combined.

The fallacy of compartmentalisation

Whatever might be said for trying to compartmentalise the domains of ethics, morality, and the law under ordinary circumstances, where the values and virtues of the former two domains are supposedly relevant only to the extent that their content is reflected in the positive law, such compartmentalisation is increasingly more difficult in the design and operation of business regulation. Like all laws, laws about business and the economy serve particular public policy goals, and make choices and set balances between particular groups of interests, and thereby implicate notions of the common good, morality, and ethics (including business and legal ethics) in their design, interpretation, and application.

More broadly, publicly exposed unethical behaviour on a mass organisational scale can also raise questions of intentional lawyerly collusion and complicity in, or alternatively unintentional and unwitting lawyerly facilitation of, unsound corporate governance practices, unethical corporate behaviour, and illegality. Holistically integrating and managing all of those aspects requires attention to the overall combination of the animating purpose, underlying values, surrounding context, informed content, and proper application of the existing and emerging norms, drivers, and disrupters of corporate governance, responsibility, and sustainability.

Corporate governance, responsibility and sustainability standard-setting

In consequence, a wide range of socio-ethical, politico-regulatory, and eco-environmental interests are inextricably implicated in the regulation and practice of successful corporate governance, responsibility, and sustainability. Those interests and their incorporation in good regulatory design, business practice, and lawyerly advice are integral in legal, regulatory, and business responses, for example, to emerging challenges of investor, customer, and stakeholder influence grounded in UN-endorsed standards for business and human rights (UNGPs) and Sustainable Development Goals (SDGs), as well as the global movement towards increasingly sophisticated investment analysis and measures based upon environmental, social, and governance (ESG) considerations.

They are also integral to any company’s policy and approach to corporate social responsibility (CSR), whatever nomenclature is used, and whether incorporated in formal reports or otherwise. Indeed, companies overwhelmingly view and report on CSR, in both mandatory and voluntary forms, in terms of what they do for employees, customers, the industry, the marketplace, the environment, their communities of operation, and the world, especially through individual companies and the business sector as a whole playing their part in meeting global existential threats of mass inequality, injustice, pandemics, and planetary climate peril.

In Australia, in the aftermath of the public debate that surrounded the proposal to embed a company’s ‘social licence to operate’ in corporate governance standards, the resulting edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations in early 2019 nevertheless contains ethically relevant standards about corporate cultures, boardroom diversity, social and environmental risks, and climate change. Indeed, work-related roles on all sides of climate change lawyering and litigation raise a series of interconnected politico-legal, socio-ethical, and eco-environmental issues, together with flow-on moral and ethical challenges of intergenerational equity,[xxiv] all of which require ‘holistic’ policy, regulatory, and business treatment, within and beyond Australia.[xxv]

Banking royal commissions, Crown Melbourne Royal Commission, and Banksia litigation

The results of successive waves of royal commissions, regulatory investigations, public and parliamentary inquiries, official law reform reports, ‘test case’ litigation, and various legal and business standard-setting initiatives (eg ‘soft’ law) suggest that we are beyond the point of taking for granted that all companies and their officials and advisers are equal in their level of appreciation and integration of ethical, legal, marketplace, and broader societal concerns in their organisations and work. For example, the Hayne Banking Royal Commission highlighted the failure of major banking and financial institutions and their governing boards to meet community and customer expectations of behaviour. The Commission made various references to the connection between unethical and unlawful banking behaviour across its interim and final reports.

Other recent royal commissions and public inquiries similarly draw the connection between unethical and unlawful behaviour. The Victorian Crown Casino Royal Commission found in late 2021 that ‘for many years Crown Melbourne had engaged in conduct that is, in a word, disgraceful’, with that single-word characterisation being ‘a convenient shorthand for describing conduct that was variously illegal, dishonest, unethical and exploitative’, putting in jeopardy a casino licence predicated on its holder being ‘of good character, honesty and integrity’.[xxvi]

More alarmingly, the Commission concluded that ‘many senior executives involved in the misconduct were indifferent to their ethical, moral and sometimes legal obligations’.[xxvii] Lawyers did not escape the Commission’s criticism, with the Commission concluding that ‘regrettably, both internal and external lawyers who knew that Crown Melbourne was wanting to engage in conduct that contravened some laws failed to counsel Crown Melbourne not to go ahead’.[xxviii]

The final ruling[xxix] in the Banksia class action saga removed two prominent barristers from the roll of barristers, referred their and other participants’ conduct for possible criminal prosecution, and made numerous references to a toxic mixture of unprofessional, unethical, and unlawful conduct that detracted from the reputation of the legal profession in the community. The social licence to operate for lawyers and businesses alike is underpinned by societal trust and hence undermined by such behaviour.

Financial services reform, climate change, and ‘good conscience’ laws

At present, there is understandable meso-level concern in Australian business, legal, and regulatory circles about the complexity, non-accessibility, and workability of corporate and financial services rules, exceptions, and exemptions.[xxx] Yet, there remains a serious and macro-level question still to be asked about the ethical and legal capacity of current Australian corporate, financial, and investment laws to meet and guide business decision-making and advice that is not only fully and equally responsive to business ethics, fair market expectations, and ‘good conscience’ laws, but also to the fourth industrial revolution’s marketplace dynamics worldwide of interconnected economies, ESG-based investing, and business’ shared role with governments and communities in climate change mitigation, management, and disclosure in achieving global net-zero emissions in the wake of COP26.[xxxi] ‘Wicked’ problems require complex, coordinated, transnational, cross-sectoral, and otherwise interconnected solutions, with multinational companies exerting influence and setting standards that transcend what any one sovereign government or multilateral institution can impose and control.

Even the supposedly simple incorporation of moral and ethical notions in various laws – notions such as honesty, fair play, and non-exploitation of vulnerable parties, for example – presents more challenges of interpretation and application for commercial courts, official regulators, businesses, and their (internal and external) legal advisers than more specific, absolute, and prescriptive laws, not least because the former are more likely to be explicitly principles-based, values-orientated, open-textured, and context-sensitive. Moreover, recent and ongoing inquiries of business relevance by the ALRC, Commonwealth Attorney-General’s Department (AGD),[xxxii] and other public agencies and departments fall for consideration against the background of an emerging body of written and unwritten law that thematically coheres in regulating an informed Australian business conscience and promoting commercial morality and business integrity – something that the Full Court (‘FCAFC’) of the Federal Court of Australia (‘FCA’) has characterised as ‘what a modern Australian commercial, business or trade conscience contains and requires, in both consumer and business contexts’.[xxxiii]

In regulating such an informed business conscience, the Commonwealth Parliament also positions and prioritises standards of good faith and fair dealing as part of its cornerstone, not least as an aspect of avoiding unconscionable business conduct under statutory unconscionability. Statutory unconscionability appears in Commonwealth legislation in the Corporations Act, Competition and Consumer Act, and ASIC Act. In a 2019 test case on the scope of statutory unconscionability, two HCA judges describe statutory unconscionability as a prohibition of conduct ‘that objectively answers the description of being against conscience’.[xxxiv] Conscience-based norms and other values underlie and guide the descriptive and normative use of unconscionable business conduct regulation.[xxxv]

Clear thinking is also needed to grapple fully with recent inquiries and reform initiatives aimed at corporate and financial services law that are rethinking the approach to legislative definition of concepts, balance between rule-based and principle-based regulation, and the place and workability of using ‘fairness’ and ‘unconscionability’ as touchstones for financial services regulation. For example, in the 2021 W A Lee lecture, Justice Sarah Derrington[xxxvi] questioned the appropriateness of putting all regulatory eggs in the ‘fairness’ basket, contemplated the enactment of value-based standards limiting parties’ capacity to contract out of decent behaviour, and suggested the incorporation of conscience-based notions in a redefined purpose for financial services legislation, as follows: ‘To enhance the integrity and stability of the financial services industry and to provide for consumer protection informed by common law and equitable principles of fair-dealing and good conscience’.[xxxvii] Financial services law reform is clearly headed in the direction of principles-based regulation.[xxxviii]

Lawyers and the ethics of CSR, ESG, and poverty-eradication

Other and newly emerging ethical dimensions or domains of concern are equally significant for commercial lawyers and their fee-paying and pro bono clients. Law firms, other professional services firms, and their corporate clients are now familiar with ESG and CSR as emerging and lucrative areas of advice for professional services firms. In addition, all such firms find that their own reputations and the ethical and moral soundness of those reputations are of considerable marketplace relevance, not only in recruiting and retaining employees and partners as a desired firm of choice, but also in demonstrating their virtue as part of their clients’ own supply and distribution chains, and even in securing a respected ‘seat at the table’ in standard-setting with governments, regulators, and peers.

In the International Bar Association (IBA) chapter referenced by Emeritus Professor Adrian Evans in his contribution to this Monash Law e-newsletter, and co-written by us, we outline the normative justification and practical steps towards a joined-up effort by law schools, clinical programs, and other lawyers beyond the legal academy to combat poverty. In that IBA book chapter, we reiterate the proposition - surprising at face value to many lawyers – that all lawyers across all branches of the legal profession[xxxix] who claim fidelity to the rule of law have a professional responsibility, grounded in socio-ethical considerations about what such fidelity means, to do something meaningful in the war against poverty, both individually and collectively.[xl] While many lawyers across all branches of the legal profession might readily think that the only legally meaningful responsibility for lawyers and clients is one that can be officially enforced under the law, the reality in practice is different and more nuanced, as illustrated immediately below.

The drivers of corporate and professional reputations and success extend beyond enforceable compliance with the law. Lawyers in practice regularly respond to a broader conception of lawyerly responsibility – namely, a largely non-enforceable commitment to pro bono legal work for clients who cannot afford it and who do not qualify for limited publicly funded legal aid, all in service to the advancement of access to justice. On any view of the rule of law, meaningful access to justice is an integral element, both in the ‘thin’ sense of access to justice in which poor people and others are meaningfully assisted through pro bono legal efforts, and in the ‘thick’ sense of access to justice in which poor people and others are empowered and supported by lawyers through public advocacy to have a meaningful ‘voice’ in the creation and reform of laws and public services affecting them.

Once those connections are accepted between the rule of law, access to justice, and poverty, it follows that our proposition about lawyerly responsibility cannot be ignored or simply deflected away as an inconvenient, unrealistic, or unworkable one. If the bar[xli] and the academy[xlii] can each be reimagined as significant actors in a constitutional eco-system, so too the eco-system for the rule of law and access to justice has a place of responsibility and specific roles for all branches of the legal profession in combatting poverty and pursuing other ideals of a civil society under law.

Corporate law, theory, and practice

Nowhere is the need to rethink ethical, moral, legal, and regulatory connections more necessary than in corporate law, theory, and practice. ‘The capitalist system is under siege’, ‘(c)ompanies must take the lead in bringing business and society back together’, and ‘we still lack an overall framework for guiding these efforts, and most companies remain stuck in a “social responsibility” mind-set in which societal issues are at the periphery, not the core’, wrote Michael Porter and Mark Kramer in a landmark HBR article a decade ago, propounding ‘shared value’ as the central organising idea for real corporate success in society.[xliii] Their assessment applies equally to much Australian political, legal, and business debate about the relationship between companies and their ‘social responsibility’ at large and under the law.[xliv]

In that sense, much discussion and regulation about companies masks underlying and undisclosed matters of ideology, philosophy, and morality, which need unpacking whenever something at the highest level of abstraction and analysis is tested at a lower level in terms of desirable standard-setting, decision-making, and good practice for companies. As Lord Sales of the UK Supreme Court has written about the post-Hayne Commission world for Australian companies, ‘the concept of “the company” or “the company as a whole” … is a vessel into which different normative content can be poured to reflect substantive views about the interests which the disembodied and fictional corporate legal person which is a company should be promoting’.[xlv]

Shareholder primacy and wealth-generation (‘shareholder primacy’) is commonly regarded as the dominant theory of the corporation in many democratic capitalist societies, although not without its strong critics. In Australian law, the co-extensiveness of the interests of shareholders as a whole with the best interests of the company for particular and even many legal purposes still begs the question of the underlying justificatory theory (if any) for that predominant but by no means complete or absolute correlation, and what limits or exceptions apply. It is above all an ideological and socio-ethical claim to insist that shareholder primacy is the best theory of the corporation, when that claim is stripped of its rhetoric and decomposed to reveal at its core a belief that one form of different kinds of capital and contributions in corporate value-creation (ie financial capital) deserves absolute priority over all others, and further that all non-shareholding stakeholder interests warrant consideration only in the instrumental sense of how well they further the interests of shareholders as a whole.

Whatever the extent to which shareholder primacy is the overriding imperative for corporate law and practice as a matter of description,[xlvi] there remain grave concerns about its ideological orientation and normative justification, its capacity to accommodate changes and conflicts in the categories and purposes of modern investment and ownership, its ability to guide discrete corporate decision-making, its suitability for societies and investors with whole-of-portfolio/economy and planetary horizons beyond the fates of individual companies, and its outer limits and ‘toxic’ effects.[xlvii]

Once company directors, law-makers, regulators, and lawyers adopt the common starting point that successful companies are legally, financially, socially, environmentally, and ethically responsible ones, we can go so far and no farther with shareholder primacy as the touchstone for everything in business. After all, even the most famous and cited scholarly defender of shareholder primacy, Milton Friedman, conceded that shareholder primacy was limited by the rules of fair competition, business ethics, and just laws.[xlviii]

Any sound theory of the corporation must either account for those systemic parameters as unarguable ‘givens’ or else justify the basis upon which such parameters and others[xlix] might condition and limit shareholder and other stakeholder interests. A year before his death, and long after his advocacy of shareholder primacy was met with considerable opposition by advocates of stakeholder-based theories of the corporation, Friedman himself pivoted to argue that ‘my statement that “the social responsibility of business [is] to increase its profits” and [another’s] statement that “the enlightened corporation should try to create value for all of its constituencies” are equivalent’.[l] At that point in the evolution of shareholder-centric and stakeholder-centric theories of the corporation, the debate is at risk of folding in upon itself.

After all, no serious advocate of shareholder primacy argues that the short-term financial interests of a company’s shareholders must be pursued at all cost, even to the detriment of other stakeholders and society at large. Equally, no serious advocate of stakeholder-based theories argues that shareholder ownership, control, and investment returns can be sacrificed simply to advance all other corporate stakeholder relationships for their own sake. Profit-making companies might need to act ethically and otherwise responsibly, but they are neither governments nor charities either.


All of this discussion about the interplay of law, morality, and ethics for business and its advisers has implications for research and education in law schools and business schools. It will increase in significance as a topic for public debate, law reform, and thought leadership from business leaders and commercial lawyers (including academics). It also affects the mindsets, training, competencies, and standards expected of lawyers across the profession, especially its commercial arms. And it certainly affects what law-makers, official regulators, courts, and others involved in national standard-setting choose to focus upon and at what level of abstraction and operation in resolving important questions about the conditions and outcomes of corporate success in 21st century society, and what regulatory approaches and levers meet the requirements of the fourth industrial revolution. On any view, the participants involved in this work need more than simply technical legal knowledge and skills about commercially relevant areas of law, regulation, and practice, in sensitising ‘hard’ and ‘soft’ law to their ethical, moral, and other societal dimensions, and in increasingly broader fields of legal and business activity.

This article is a piece of thought leadership by Professor Bryan Horrigan as part of Monash University’s association with the Cranlana Centre for Ethical Leadership.

[i] Whatever the similarities and differences between the two concepts, morality is commonly society-focused (eg common or public morality) and ethics is commonly individual-focused, even when used in organisational or professional contexts (eg ethical standards of a profession and organisational codes of ethics and conduct).

[ii] For judicial references to ‘commercial morality’, see, for example: Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; CSR Limited, in the matter of CSR Limited [2010] FCAFC 34; In the matter of Gurrawillie Street Pty Limited [2020] NSWSC 1074; and Re JSSP Holdings Pty Ltd [2021] VSC 33. For judicial references to community values, see, for example: Mabo (No 2) v Queensland ; and Carson v John Fairfax & Sons Ltd & Slee [1993] HCA 31; and various academic contributions in Symposium on Community Values in Australian Law (1995) 17 Sydney Law Review.

[iii] President of the Court of Appeal, Supreme Court of Victoria.

[iv] C. Maxwell, ‘Equity and Good Conscience: The Judge as Moral Arbiter and the Regulation of Modern Commerce’ Victoria Law Foundation Oration, August 2019, 13; emphasis added.

[v] Chief Justice of the Federal Court of Australia.

[vi] J. Allsop, ‘The Intersection of Companies and Trusts’ Harold Ford Memorial Lecture, 2019; bold original emphasis, italicised added emphasis.

[vii] Eg personal and often multi-layered conflicts of interests and roles.

[viii] Eg codes of ethics and conduct.

[ix] Eg formal standards incorporating ethics of a profession, jurisdictionally or otherwise.

[x] Eg areas of business law and practice that use ethical concepts (eg honesty) or are otherwise grounded in notions of a properly informed and instructed ‘good conscience’, and which are enforced by regulators and applied by courts.

[xi] Eg socio-ethical dimensions and interests implicated in non-discriminatory responses to pandemics, climate change regulation and business action, and elimination of bullying and harassment within public and private sector organisations.

[xii] Eg judicial references to ‘commercial morality’ and an ‘Australian trade or business conscience’ (see below).

[xiii] Eg codes of conduct and business ethics.

[xiv] Eg socio-ethical dimensions of environmental, social, and governance (ESG) concerns of corporate investors, stakeholders, and regulators.

[xv] Eg laws on unfair, unjust, unconscionable, unreasonable, and bad faith transactions and behaviour, and laws based upon ‘good conscience’.

[xvi] For recent evidence-based analysis of ASIC’s use of ‘stepping stones’ liability, see: I. Ramsay and M. Webster, ‘An Analysis of the Use of Stepping Stones Liability Against Company Directors and Officers’ (2021) 50 Australian Bar Review 168.

[xvii] Eg legislators, judges, regulators, royal commissioners, public authorities etc.

[xviii] Eg corporate counsel, company directors, and commercial legal advisers.

[xix] Muschinski v Dodds (1984) 160 CLR 583, 616 (Deane J), quoted in P. Finn, ‘Unconscionable Conduct’ (1994) 8 Journal of Contract Law 37, 38.

[xx] Eg the incorporation of a ‘social licence to operate’ in corporate governance standards, the proper boundaries of companies and business leaders engaging in public advocacy and political lobbying, the multiple forms of corporate social responsibility (CSR) and the extent of their consistency with the law, and the responsibilities of business in playing its part along with governments and societies in addressing existential global threats such as mass pandemics and climate change.

[xxi] Eg D. Dyzenhaus, M. Hunt, and M. Taggart, ‘The Principle of Legality in Administrative Law: Internationalisation as Constitutionalisation’ (2001) 1 Oxford University Commonwealth Law Journal 5, 6.

[xxii] R. Finkelstein, Report of the Royal Commission into the Casino Operator and Licence, October 2021, [16].

[xxiii] F. Kunc, ‘The Rule of Law’ (2021) 95 Australian Law Journal 311, 313. See the discussion later in this article about the legal profession, CSR, ESG, and poverty-elimination.

[xxiv] Eg Sharma by her litigation representative Sister Marie Brigid Arthur v Minister for the Environment [2021] FCA 560, now on appeal.

[xxv] Eg B. Preston, ‘Climate Conscious Lawyering’ (2021) 95 Australian Law Journal 51.

[xxvi] R. Finkelstein, Report of the Royal Commission into the Casino Operator and Licence, October 2021, [3]-[4].

[xxvii] R. Finkelstein, Report of the Royal Commission into the Casino Operator and Licence, October 2021, [15].

[xxviii] R. Finkelstein, Report of the Royal Commission into the Casino Operator and Licence, October 2021, [16].

[xxix] Bolitho v Banksia Securities Ltd (No 18) (remitter) [2021] VSC 666.

[xxx] Eg S. Derrington, 22nd W A Lee Equity Lecture, Banco Court, Supreme Court of Queensland, 18 November 2021.

[xxxi] The Centre for Policy Development ( has commissioned three publicly available legal opinions on the legal obligations of companies and their directors for climate change management and disclosure, all by Noel Hutley SC and Sebastian Hartford Davis, both of whom are known to the author, who was a member of the expert reference group and industry roundtables for CPD concerning this work. See also: Monash Law, ‘Directors Face Greater Exposure to Liability for Climate Change Risks’

[xxxii] AGD, ‘Inquiry into the use of the term ‘good faith’ in civil penalty and criminal offence provisions in Commonwealth legislation’, 2021 (report unavailable at the time of writing). The author made a public submission to this inquiry. See:

[xxxiii] Paciocco v Australia and New Zealand Banking Group Limited [2015] FCAFC 50, [296] (Allsop CJ, Besanko and Middleton JJ separately agreeing).

[xxxiv] ASIC v Kobelt [2019] HCA 18, [14] (Kiefel CJ and Bell J).

[xxxv] For a recent discussion of this aspect, see, for example: P. Toy, ‘An Examination of Legal Values in Statutory Unconscionable Conduct’ (2020) 48 Australian Business Law Review 406; and S. Derrington, 22nd W A Lee Equity Lecture, Banco Court, Supreme Court of Queensland, 18 November 2021.

[xxxvi] President of the Australian Law Reform Commission.

[xxxvii] S. Derrington, 22nd W A Lee Equity Lecture, Banco Court, Supreme Court of Queensland, 18 November 2021.

[xxxviii] Australian Law Reform Commission (ALRC), Financial Services Legislation: Interim Report A (ALRC Report 137), November 2021.

[xxxix] Eg whether in law schools, law firms, companies, or somewhere else.

[xl] B. Horrigan and A. Evans, ‘The Role of Law Schools and Clinical Programmes in Ending Poverty’ (Chapter 2), in N. Clark and N. Gold (eds), Eradicating Poverty Through Social Development: A Practical Guide for Lawyers, IBA, 2021  <>.

[xli] W. Sofronoff, ‘The Constitutional Significance of the Australian Bar’ (2019) 48 Australian Bar Review 23.

[xlii] L. Lazarus, ‘Constitutional Scholars as Constitutional Actors’ (2020) 48 Federal Law Review 483.

[xliii] M. Porter and M. Kramer, ‘Creating Shared Value: How to Reinvent Capitalism – and Unleash a Wave of Innovation and Growth’, Harvard Business Review, January-February 2011.

[xliv] On corporate social responsibility generally, see, for example: M. Warren, ‘Speech – Corporate Social Responsibility and the Best Interests of the Corporation: Can they Coincide?’ (VSC) [2006] Victorian Judicial Scholarship 11; and B. Horrigan, Corporate Social Responsibility in the 21st Century: Debates, Models and Practices Across Government, Law and Business (Edward Elgar, 2010).

[xlv] P. Sales, ‘Directors’ Duties in a Post-Hayne World: “The Company” as More Than the Sum of Its Shareholders’ (2020) 94 Australian Law Journal 936, 937.

[xlvi] For recent and high-level judicial discussion of this topic, see, for example: G. Nettle, ‘The Changing Position and Duties of Company Directors’ (2018) 41 Melbourne University Law Review 1402; and J. Edelman, ‘The Future of the Australian Business Corporation: A Legal Perspective’ (2020) 14 The Judicial Review 199.

[xlvii] L. Stout, ‘The Toxic Side Effects of Shareholder Primacy’ (2013) 161 University of Pennsylvania Law Review 2003; cf H. Hansmann and R. Kraakman, ‘Reflections on the End of History for Corporate Law’, in A. Rasheed and T. Yoshikawa (eds), The Convergence of Corporate Governance (Palgrave Macmillan, London, 2012), 32-48.

[xlviii] M. Friedman, 'The Social Responsibility of Business is to Increase Its Profits' The New York Times Magazine (New York, 13 September 1970).

[xlix] Eg the collective and individualised role of business generally and various industry areas and companies in particular (such as the energy, resources, financing, and investment sectors and organisations) in working with others across sectoral and national boundaries to advance the outcomes of COP26 and address the global existential threat of climate change disaster.

[l] M. Friedman, J. Mackey, and T J Rodgers, ‘Rethinking the Social Responsibility of Business’, Reason, 2005.

Professor Bryan Horrigan is the Dean of the Faculty of Law at Monash University.