The collapse of broking firm BBY has highlighted the need for company directors to be aware of a company's financial circumstances, and their obligation to understand the business operations. Australian tennis legend Ken Rosewall has admitted to a court that he didn't sufficiently understand BBY's business, and had really only joined the board to help his son, CEO Glenn Rosewall, in a PR capacity. He also admitted that he didn't understand the potential consequences of acting as a director, which include being personally liable for taxation debts. This is a salutary lesson for directors of privately owned and family businesses, many of whom might be in the position as a support for family members, without understanding the accompanying responsibilities.
Mr Rosewall made it clear to the court that he did not fully understand the broking business or the more complex trading services that BBY was providing to clients. He saw his role as director as more of a public role to help his son grow the BBY business. "Not having knowledge of the inner points of the business I would be in assistance in relation to public relations and publicity," he said. In response to the question of whether he understood he had to ensure the company was solvent, he replied: "I didn't know anything about it really."