The Federal Court's ASIC v Bekier ruling draws a clear line on AI in the boardroom. Here's what directors and company secretaries managing entity portfolios need to know — and do — right now.
The Federal Court just handed down the most important corporate governance ruling of 2026 — and buried inside the 200+ page judgment is something every director and company secretary needs to read. Justice Lee, in ASIC v Bekier [2026] FCA 196, didn't just rule on casino governance failures. He drew a line in the sand on how AI can — and can't — be used in the boardroom.
If you're managing entity portfolios, overseeing compliance, or sitting on a board, this ruling changes how you think about technology in governance. Here's what happened, what it means, and what you need to do about it.
ASIC brought civil penalty proceedings against former directors and senior executives of The Star Entertainment Group. The core allegation: governance failures related to Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) risks.
Former CEO Matthias Bekier and former General Counsel Paula Martin were found to have breached their duties under section 180(1) of the Corporations Act 2001. They failed to escalate serious AML/CTF risks to the board. They failed to inform directors about law enforcement interest and suspicious conduct.
The seven non-executive directors? Their claims were dismissed. The Court drew a clear distinction between failures of management and failures of oversight. Non-executive directors were entitled to rely on management to escalate material risks — which, in this case, management failed to do.
The penalty hearing for Bekier and Martin is scheduled for May 27, 2026.
But the headline-grabbing governance breach isn't the part that should keep you up at night. It's what Justice Lee said about artificial intelligence.
Here's the critical passage from the judgment. Justice Lee acknowledged that AI can serve as a "valuable tool" for directors managing what he called the "heroically vast" volume of board materials. AI can help directors control, process, and analyse information — potentially assisting them in discharging their duty of care and diligence under section 180(1).
But — and this is the part every director needs to internalise — AI cannot replace a director's personal and non-delegable duty to exercise informed independent human judgment.
Let me translate that into plain English: You can use AI to help you read faster, spot patterns, and surface risks. You cannot outsource your thinking to it.
The Court explicitly warned that inadequately deployed or misdirected AI could actually increase a director's legal exposure. Using AI without proper governance frameworks isn't just risky — it could be the thing that gets you personally liable.
If you're a company secretary managing 50, 100, or 200+ entities, this ruling creates both an opportunity and a mandate.
Justice Lee effectively endorsed the use of AI in governance workflows. This isn't a Luddite ruling. The Court recognises that modern directors face information volumes that are genuinely unmanageable without technology. AI that helps you:
...is exactly what the Court says directors should be using to discharge their duties. The ruling validates technology-assisted governance — provided it's done properly.
Here's where it gets sharp. The Court also said that companies need "robust governance frameworks, including formal policies, around the use of AI in the boardroom." That means:
Justice Lee was explicit: "Shadow IT" or informal AI use is unlikely to satisfy a director's duty of care. If your team is using ChatGPT to summarise board papers and nobody has a policy around it, you've got a problem.
One of the most significant aspects of this ruling is what it does to the "I didn't know" defence.
Justice Lee stated that directors cannot rely on the volume of information as an excuse for disengagement. Boards must control the information they receive, and directors are expected to take a "diligent and intelligent interest" in available information.
Combine that with the AI endorsement, and the Court is essentially saying: The tools exist to help you manage information overload. If you don't use them, that's on you.
For company secretaries preparing board packs, this changes the game. You need systems that:
Manual spreadsheets and shared drives don't cut it anymore. Not because they're old-fashioned — because they can't provide the transparency and audit trail that the Court now expects.
The Bekier ruling also reinforced something critical about information flow in multi-entity structures.
The non-executive directors were cleared because management failed to escalate material risks. The Court held that NEDs were entitled to rely on management to surface critical issues. When management didn't, the failure sat with management — not the board.
But here's the catch: this protection only works if your governance infrastructure actually enables proper escalation. If a compliance issue is sitting in a spreadsheet that nobody checks, or buried in an email thread from six months ago, the "management didn't tell us" defence starts to look thin.
For organisations managing complex entity portfolios, this means:
The Bekier ruling doesn't exist in a vacuum. ASIC's 2026 enforcement priorities signal an escalation in governance enforcement across the board:
The message is clear: ASIC isn't just prosecuting fraud. They're going after governance infrastructure failures. Boards that can't demonstrate proper oversight systems are exposed.
Based on the Bekier ruling and ASIC's current enforcement posture, here's a practical checklist for company secretaries and compliance professionals:
Document every AI tool being used in governance workflows. If people are using consumer AI tools informally, either formalise the process with proper policies or shut it down. The Court has made clear that informal AI use creates liability.
Create a board-approved policy covering:
Map out how compliance risks flow from entity level to management to the board. Identify gaps where material risks could get stuck. If your current process relies on email chains or verbal updates, build something more structured.
The Court has endorsed technology-assisted governance. If you're still running entity portfolios on spreadsheets, shared drives, and calendar reminders, you're operating below the standard the Court now expects.
Look for systems that provide:
Directors need to understand what Bekier means for them personally. The duty of care under section 180(1) is personal and non-delegable. AI helps, but it doesn't absolve. Schedule a governance session to walk through the ruling's implications.
ASIC v Bekier is the clearest signal yet that Australian courts expect directors to embrace technology — but not blindly. AI is a governance accelerator when deployed with proper frameworks. It's a liability multiplier when used without them.
For company secretaries and compliance teams managing complex entity portfolios, the ruling is both validation and warning. The tools to manage governance properly exist. The Court knows they exist. ASIC knows they exist.
The question is whether your organisation is using them.
EntityFlo is building the entity management platform for Australian mid-market businesses — combining real-time ASIC sync, AI compliance monitoring, and governance workflows in a single system of record. If you're managing 50+ entities and want to see how it works, [book a demo](https://cal.com/nathan-carroll-uoukgd/entityflo-demo).
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