TUB Investment Ltd (TUB) is a specialist accounting management company that is listed on the ASX. TUB has attracted many investors across the world, and the company is generally highly regarded. TUB has 4 directors; Mr Staller, Mrs Drifter, Mr Shapeless & Dr Wittless (who holds a PhD on the topic “the very brief history of electronic accounting”).

At a directors’ meeting in March this year, a proposal to purchase a small accounting management company is discussed. The proposal is accompanied by a report detailing the financial status of a company called Risky Business Pty Ltd.

Only 2 of 4 directors attend this meeting in full. Mrs Drifter does not attend at all as she is away on holiday in the Bahamas. Mr Shapeless attends the meeting initially, however he leaves abruptly during opening proceedings for medical reasons (he has recently undergone emergency surgery). During the meeting, Dr Wittless glances over the financial report for Risky Business Pty Ltd and comments that it “sort of looks impressive”. Mr Staller does not read the financial report for Risky Business Pty Ltd as he considers the opinion of Dr Wittless to be entirely reliable. Together, Mr Staller and Dr Wittless approve the proposal for TUB to purchase Risky Business Pty Ltd.

Not long after the purchase, it becomes apparent that Risky Business Pty Ltd is financially unsound and purchasing the company has grave consequences for TUB, which appears to have become insolvent. The shareholders of TUB are angry and wish to make the Board accountable for their decision-making.

Discuss the liability of each of the 4 directors of TUB in terms of their duties under the Corporations Act 2001 (Cth).