If adopted by the Coalition, the new defence would shield directors from prosecution where it cannot be proved they told a lie or failed to act with ''integrity and commitment''.

The new provision would apply to directors facing alleged contraventions, including offences around financial reporting, continuous disclosure rules and misleading or deceptive conduct.

The disgraced boards of asbestos maker James Hardie and collapsed shopping centre owner Centro were prosecuted under existing laws for failing their duties as directors.

AICD general manager Steve Burrell said the change would not act as a ''blanket amnesty'' for every director but conceded that if the James Hardie case was run again, it would be run in a different way.

''It's possible it would turn out differently, but then again it might not. It depends on the facts of the case,'' he said. ''The law as it currently stands is having a chilling effect on people making reasonable business decisions. In our system, some risk has to be taken. At the moment it's tilted too far the other way.''