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Right: Members of the Asbestos Diseases Foundation of Australia outside the building where the James Hardie directors' penalties were decided. .

Arguments suggesting the penalties were adequate

1. The fines are in accord with those generally imposed
It has been claimed that the penalties are generally in accord with those imposed on executive officers and directors who are found guilty of serious misconduct.
Macdonald's penalty reflects the fact that he was found to have breached ten provisions of the Corporations Act - with his 15 year disqualification period in a similar range to Ray Williams and Rodney Adler in the HIH Insurance case, where the directors concerned were found to have similarly breached the Act.
There are those who suggest that as the James Hardie directors were not seeking their own financial advantage, the penalties imposed upon them appear quite harsh.
The case has been compared to that of Steve Vizard, who as a Telstra director, was found guilty of using insider information when making investments. He received a shorter ban and an only slightly larger fine than .
James Frost, deputy commentary editor for Business Spectator and the author of Online Share Investing for Dummies, has stated, 'Those among us with longer memories will remember the case of former Telstra director Steve Vizard who was found to have used confidential and information to trade shares in a number of technology companies ahead of official announcements from the company. While Vizard ultimately lost money on the trades, he was banned from running a company for ten years and fined $390,000.'

2. The bans will end the corporate careers of most of the former James Hardie directors
Even if the bans were ultimately overturned, it has been claimed they have damaged the credibility of the directors to such an extent as to have effectively ended their corporate careers.
As an instance of this, even prior to the adverse finding against her, former James Hardie executive Meredith Hellicar stood down from her role as a non-executive director at financial services giant AMP. In April, 2009, AMP announced that Ms Hellicar, who was appointed to the company's board in 2003, would not run for re-election at the company's annual general meeting in May.
Similarly, Pru Bennett from the corporate governance advisory firm Regnan noted that former James Hardie director, Peter Willcox would be unlikely to retain the confidence of the shareholders of any subsequent company of which he was a director.
'It is interesting to note that it is likely that he will be facing re-election at the 2009 Telstra Annual General Meeting,' she said. 'Given the voting levels of the recent RIO AGM against a number of non-executive directors there, it is likely that they will be voting against Peter Willcox at that annual general meeting.'
Independent telecommunications analyst Paul Budde has stated, 'What Telstra now needs is somebody who is not controversial. Somebody who is not tainted and can step in and talk to the Government without ... the Government [being] embarrassed by all sorts of media questions about Peter Willcox's activities in Hardies. So I think that it doesn't make sense for the Telstra board to look at a person that might result in asking questions.'
It has been claimed that the damage done to these directors is so great that in or outside Australia they are now virtually unemployable. No company would want the bad publicity which must inevitably come from having any of these men and women sitting on the Board.
Professor Ian Ramsay from Melbourne University has stated, It may be technically possible for these people to work for James Hardie because it isn't an Australian company.
However, I would have thought there's no prospect of that occurring in reality because of the extraordinary public condemnation that would unfold.'

3. The penalties punish individuals who should not have been held responsible for approving the media release and others who were not there when the release was approved
It has been claimed that the fines and bans are very harsh as they are being imposed on non-executive directors.
Non-executive directors generally have the responsibility to guide and monitor the management of the company, rather than to be involved in the operational responsibility of the company. The non-executive directors claimed that the approval of the media release should not have fallen to them as it was more properly an operational responsibility. Aspects of companies' business that refer to matters of transparency and disclosure are generally regarded as operational matters. Thus the accused directors had claimed that the responsibility for the decision should not rest with them.
Five of the non-executive directors chose challenged the accuracy of the Board minutes which stated that the announcement had been approved. Further two of the non-executive directors were based in the United States and had not seen the draft announcement.
Another member of the board has also argued that as he was not experienced in public relations, he was entitled to leave the decision on the approval of public statements to those in a better position to decide its appropriateness.
James Frost on has SBS World News Australia blog has stated, 'Two of the directors, Michael Gillfillan and Martin Koffel, were overseas at the time of the infamous board meeting and have proved that the release was never sent to them. And yet the judge didn't differentiate between any of the non-executive directors, banning each of them from running a company for five years and fining them $30,000. Gillfillan, Koffel, Helicar and a third director, Michael Brown, are planning to appeal the decision.'
The former lower standard of care required by non-executive directors was articulated in Australian Securities and Investments Commission v Rich and Others (2004) 50 ACSR 500, where White J concluded a non-executive director could place reliance on the advice provided by management provided reliance on the advice was reasonable.

4. If the penalties were too harsh they would discourage directors from taking the risks that are necessary if a business is to be successful
It has been suggested that the penalties imposed on the James Hardie directors may be too harsh and may discourage directors from taking the sorts of risks necessary to promote profits and trade their companies out of difficulties.
This point has been made in the Mallesons Stephen Jacques Review, where a commentator has asked, 'At a time when other jurisdictions are looking to salvage their major companies and restore confidence, the question must be asked, what are the limits under Australian law for director and executive duties in the current uncertain and complex times?
Will the recent decisions lead to director and executive resignations and the loss of high calibre directors and officers?
Will they lead to the administrators being dismissed too early and the associated loss of value, instead of encouraging responsible and reasonable risk taking to salvage the business?
If the administrators are to be called in early should the moratorium provisions be extended to preserve essential contracts and value particularly in the floating charge assets?
It can only be hoped that this sensitive and controversial balancing of interests against the backdrop of the global financial crisis will be considered by the Commonwealth in its recently announced audit to be conducted in the second half of 2009 into the laws that impact the issue of company director liability.'
It has been claimed that penalties such as those imposed on the James Hardie company directors have the effect of lifting 'the corporate veil'.
A research note released on August 10, 2004, for the Parliamentary Library, Department of Library Services, states, 'The term 'corporate veil' refers to the protection given by the principle of 'limited liability'. Under this principle, companies are legal entities separate and distinct from their individual members. Hence liability to a company's creditors is limited to the company's assets and does not extend to the personal assets of company members.'
It has been argued that these penalties undermine this protection and as such undermine entrepreneurial risk taking which encourages economic growth.

5. The penalties are likely to send a message to other directors
The Australian Securities Investments Commission (ASIC) has claimed that the court penalties imposed on the former James Hardie Industries board will show companies and directors that they must check the veracity of statements made to the public.
An ASIC spokesperson has stated that the court ruling and penalties illustrate 'that in making statements to the market, companies must carefully assess and check the veracity of those statements'.
ASIC has further noted that the court ruling also provides guidance and direction on the scope and content of the duties of executives when taking matters to the board and disclosing information to the market, and for non-executive directors on approving statements resulting from board decisions.
ASIC chairman Tony D'Aloisio said boards should carefully consider the implications of the court decision and assess what improvements they can make to their decision making processes. This includes the way they convey decisions to the market and the way they conduct investor briefings and so called road shows.
Mr D'Aloisio stated, 'The decision is another important step in improving corporate governance in Australia and that improvement will add confidence to the integrity of our markets.'
Tim Sheehy, chief executive of Chartered Secretaries Australia, said 'whether we like it or not, the current climate is telling us that it is no longer acceptable to shift responsibility to adviser outside the boardroom'.