The Abbott government is considering changes to financial laws that, had they been in place at the time, may have seen the directors of James Hardie escape prosecution.

The group representing Australia's most powerful boardrooms will on Thursday release a proposal to water down the Corporations Act and ASIC Act, saying corporate directors need a ''safe harbour'' from personal liability.

The Australian Institute of Company Directors has been lobbying Finance Minister Mathias Cormann, benched Assistant Treasurer Arthur Sinodinos and Attorney-General George Brandis for a new ''honest and reasonable director defence'' to be inserted into existing laws designed to protect shareholders and consumers from boardroom negligence.

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.''

But even some members of the AICD oppose any change.

Tim Lyons, Assistant Secretary of the Australian Council of Trade Unions said: ''As a company director and member of the AICD, I can see no basis for watering down current duties.

''I challenge anybody who wants them watered down to identify a single case where a director has been unreasonably treated by the courts or authorities as a result of the current laws. Shareholders, in whose interest directors must act, have every right to be highly sceptical of any proposal to reduce governance standards.''

Fairfax Media understands the AICD lobbied the former Labor government without success.

Former Treasurer Wayne Swan said: ''It was never raised with me but if it really was going to have the consequence of people not being liable for James Hardie-type offences I can tell you I would not have entertained it.''

An Abbott government spokeswoman said: ''The AICD has approached the government on this issue. As with all approaches, we will look at their proposal with due consideration.''

It is understood the AICD has found ''general support ''with Coalition ministers. In its draft proposal, released on Thursday, the AICD said the defence rule would act as a ''broad-based defence'' that reflects the ''modern commercial reality of today's corporations''.

Mr Cormann's office did not respond to a request for comment.

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