10/06/2026
If you are a company director and you think AI governance is still an emerging issue you can monitor from a distance, a landmark speech delivered last month at Melbourne Law School by the Chief Justice of New South Wales should change your mind.
In the 2026 Harold Ford Memorial Lecture, Chief Justice Andrew Bell set out in careful and unflinching terms what the era of artificial intelligence actually means for directors’ duties and corporate responsibility under Australian law.
The speech deserves serious attention from every board in this country.
Three things stand out for us as commercial and financial services lawyers.
Regulatory lag is real, but it is not a shield for directors.
Chief Justice Bell is explicit: law always runs behind technology, and the pace of change in AI makes that gap unusually wide. But he is equally explicit that directors cannot treat lag as permission to wait.
ASIC has already flagged enforcement action for the “poor use of AI” in its 2025-2026 Corporate Plan.
APRA has warned in April 2026 that AI adoption is outrunning governance maturity across the sector.
The Chief Justice’s conclusion is blunt: “For them, lag is not really an option.”
Directors’ duties now extend directly into AI literacy and AI governance
The duty of care and diligence under section 180 of the Corporations Act is not static.
Chief Justice Bell draws on Justice Lee’s recent judgment in ASIC v Bekier, the first Australian decision to directly address AI use by directors, to make the point that an “irreducible requirement of care and diligence” now includes taking reasonable steps to understand how AI is being used within the company and the risks that come with it.
Directors who cannot engage with those questions are not protected by ignorance.
The business judgment rule safe harbour is equally at risk.
A director who simply adopts an AI recommendation without independent reasoning of their own almost certainly cannot rely on section 180(2).
The Chief Justice puts it plainly: the “black box” problem, the inability to trace how an AI reached its output, directly impairs a director’s ability to demonstrate the rational, independent judgment the rule requires.
~ AI in the boardroom is already reshaping governance, whether boards are ready or not**
AI tools for board preparation, transcription, and minute-drafting are now commercially available and actively being adopted by Australian companies.
Chief Justice Bell raises serious questions about the legal and forensic consequences: discoverability of AI prompt histories, inadvertent privilege waiver, surveillance law compliance, the chilling effect of recording on frank boardroom debate, and the underappreciated risk of “groupthink” forming around outputs rather than human judgment.
His guidance is measured and practical.
AI used well, as a tool to assist informed decision-making, not as a substitute for it, is consistent with directors’ duties and may ultimately be expected of directors in data-intensive decisions. AI adopted without governance, without policy, without understanding of its limitations, is a liability waiting to crystallise.
~What this means for your organisation~
If your board does not yet have a documented AI policy, a clear position on which platforms may be used by directors and management, and a framework for disclosing AI use in board papers, that gap needs to close.
These are not hypothetical future problems. ASIC is watching, litigation is coming, and the standard of care is moving.
Click Legal orks with boards, executives, and financial services businesses on commercial law, regulatory , and governance frameworks. If you want to understand what this shift in the legal landscape means for your organisation, we are here to help.
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**Source reference (recommended as a comment or end-note):** Chief Justice Andrew Bell AC, “Corporate responsibility and directors’ duties in the era of Artificial Intelligence,” 2026 Harold Ford Memorial Lecture, University of Melbourne Law School, 21 May 2026. Available at:
Hannah Deuk
Australia’s Leading Commercial, Financial Services & AML/CTF Lawyers | Click Legal
