HBG, Independent Directors Sacked

[mtd#2]

1. What directors of a JV legally owe

Once someone sits on the board of a joint venture company, they owe duties to the JV itself, not to whoever appointed them.

Under Australian law (Corporations Act + general law), directors must:

Act in the best interests of the JV

Act for a proper purpose

Avoid misuse of position or information

Manage conflicts appropriately


That duty does not change just because:

They are an employee of a shareholder, or

They were nominated by the parent company


So you’re absolutely right on the principle:

> If acting in the parent’s interests conflicts with the JV’s interests, the director must put the JV first.




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2. Does that mean employee-directors are “in conflict”?

Technically: yes, a structural conflict exists

Because:

As employees, they owe duties to their employer

As directors, they owe duties to the JV

Those interests will not always align


This is often called a “potential” or “situational” conflict, not an automatic breach.

Practically: this is extremely common

Most JVs are set up exactly like this:

Each shareholder appoints directors

Many of those directors are senior employees

Everyone knows they bring a shareholder perspective


Courts and regulators accept this reality — as long as it’s managed properly.


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3. How this conflict is usually managed (and made lawful)

Well-drafted JV structures rely on several safeguards:

a) Disclosure

Employee-directors must:

Disclose their employment relationship

Disclose specific conflicts when they arise (e.g. a contract between JV and parent)


b) Recusal

When there’s a direct conflict (e.g. pricing, disputes, enforcement of shareholder rights):

The conflicted director may need to abstain from discussion or voting


c) Shareholder agreement protections

JV agreements often:

Explicitly allow nominee directors

Acknowledge their dual roles

Define when they can receive/share information with the parent

Set reserved matters requiring shareholder (not board) approval


d) Board composition balance

Having:

Independent directors, or

Equal representation from JV partners


reduces the risk that the board becomes a proxy battleground for parents.


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4. What directors cannot do

Even with all the above, an employee-director cannot:

Advance the parent’s interests at the JV’s expense

Use JV information to benefit the parent improperly

Sabotage the JV to improve the parent’s negotiating position

Treat themselves as a “delegate” rather than an independent decision-maker


Courts are very clear on this point.


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5. So are they “meant” to act against their employer if required?

Uncomfortably, yes.

If a genuine conflict arises:

The director must prioritise the JV

Or step aside from the decision

Or, in extreme cases, resign from one role


That tension is real, and it’s one reason JV boards can be tricky.


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6. Why companies still do it anyway

Because employee-directors:

Understand the business deeply

Can move faster than independents

Ensure the shareholder’s investment is properly overseen


The legal system accepts this as long as governance is tight.


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Bottom line

✔️ Yes, there is an inherent conflict risk

✔️ Yes, JV directors owe duties to the JV, not their employer

❌ No, this does not automatically make the arrangement improper or unlawful

✅ The key issue is how conflicts are disclosed and managed

Great post.

Everything you've mentioned above boonboon, who has the power to make sure that a JV is governed as per above?

 

[GCfan]

did they think about incoming future sponsorships. Liability's etc
Your questioning because you think its maybe better , or stirrng

No I’m not stirring. I explained why I thought they agreed to the term. Richo is good but he’s not that good to do a completely one sided deal.

 

[mtd#2]

Stuff the upgrades, go back to hills and ovals!

It would be a great site seeing an NRL game played at a local footy field, it'd be packed to the rafters

 

[Big Red]

Great post.

Everything you've mentioned above boonboon, who has the power to make sure that a JV is governed as per above?

Agree, great post @ boonboon.

ASIC can take enforcement action where there’s a breach of the corporations act. Not sure what would trigger a response, perhaps an anonymous whistleblower!

Presumably the NRL could also step in if they have given HBG notice to fix their governance and were shown to be in breach.

 

[Canberratiger]

I can't believe that some of you want to give HBG another chance. All they have done is sack Richo, take over the board, and then bring back Barry to try to cover it up as if they somehow lost the battle. They have continuously made poor or underhanded decisions for far too long!
I want new owners who will dissolve this notion of a Joint Venture. Make it 1 club from top to bottom. Clean house of this BS as much as possible.

 

[UnderTheBus]

Or Fallah

God help us if this bloke ever gets anywhere near the football club board.

 

[batboy]

God help us if this bloke ever gets anywhere near the football club board.

Is it just me,
Or have his social media tirades seemed to have gone un-reported by the Journos?

#Leakfound

 

[UnderTheBus]

Is it just me,
Or have his social media tirades seemed to have gone un-reported by the Journos?

#Leakfound

Absolutely! His outbursts could not make it any clearer of the mentality he and his mates have towards Wests Tigers, the JV and the members and fans.

 

[liltiger]

He’s a politician. They always target a lesser issue to distract from a bigger problem. Seems like they are doing something.

I would use an example from the Bondi attack but I don’t want to derail the topic.

As long as he put HBG on a short leash and really did make them aware that he was prepared to place an administrator in. Now HBG have the boardroom iv got no doubt we will be back here in 18 months - 2 years. Then we will hopefully be on our way out of this 25 year misery were all in. I'm just curious if the treat is real if that will have any impact on the HBG board with all the power plays. Would the threat of losing Wests Tigers be enough to stop anymore power moves. Hypothetically if there was another round of directors banned for 8 years might the N.R.L just step in. Who would want to be known as being involved with a boardroom coup at HBG that led to the N.R.L intervening and potentially taking Wests Tigers from them. No one. So the rats who ruined us have consolidated their power in our boardroom and by PVL making threats and doing nothing he's helped them consolidate power in the HBG boardroom aswell. Noone would be game now to challenge them with the threat of N.R.L intervention hanging above their head, so noone from within HBG can do anything to help us now, we all just have to hope the egos are too big and there incompetence so great they screw up again like they have been for years on our board.