Discuss thepotential liabilityof Stationery Pty Ltd's directors under section 180 of the Corporations Act 2001.

You must cite relevant legislative provisions from the Corporations Act 2001 and common law to explain your answer.

Facts-

• Stationery Pty Ltd is a company that sells high end stationery products.Unfortunately, sales have dropped recently.

• The company hires Rick Pen, a New York-based consultant, to advise it on how to increase sales.Stationery Pty Ltd also names Rick to its board as a non-executive director. Rick does not make it to Australia very often and although the company arranges a dial-in number so that Rick can participate by teleconference, Rick forgets to call in to most of the company's board meetings, which take place in the middle of the night, New York time.

• Rick is not that concerned, though as he says, "I'm only a marketing person.I don't know how to run companies.Anyway, the other directors and outside advisers will tell me whatever I need to know."

• In the meantime, Stationery Pty Ltd issues its year-end financial statements.Neither Robert, a non-executive director who is an accountant by trade, nor the outside accountants or auditors realize that the financial statements neglected to disclose that Stationery Pty Ltd had just borrowed $50 million from Bad Bank.The error made Stationery Pty Ltd's financial situation look significantly healthier than it in fact was.