Australia: shareholder meetings - boards, shareholders and the balance of power

Judgment was given last Friday in Australasian Centre for Corporate Responsibility v Commonwealth Bank of Australia [2016] FCAFC 80. The case - on appeal from [2015] FCA 785 and heard by Allsop CJ, Foster and Gleeson JJ - is an important decision on the operation of shareholder meetings as well as the balance of power between the board of directors and shareholders.

At issue was whether shareholders were entitled to table resolutions at a shareholders' meeting for the purpose of expressing an opinion regarding the management of the company. The resolutions were not intended to be acts of the company, or to direct the directors to act in particular way. In the court's view (at para. [60]):

" ....the shareholders in general meeting did not have a role to play in the exercise of powers vested exclusively in the board by passing a resolution which would express an opinion on the exercise of those powers. That general proposition may be affected by the particular constitution of a company, but it applies in this case".