A finding of contravention of the statutory duty of care and diligence under s 232(4) necessarily implies that the contravening conduct was unreasonable, but the degree of unreasonableness remains a relevant discretionary factor in the exercise of the exoneration power under ss 1317JA and 1318. The honesty of a defendant satisfies the first requirement but does not of itself contribute to the second requirement (whether the person ought fairly to be excused). The seriousness of a contravention has three components: the importance of the provision contravened in terms of public policy, the degree of flagrancy, and the consequences in terms of harm to others. A pattern of defective disclosure by senior executives to the board during a hostile takeover defence is a matter of substantial significance weighing against relief.
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