Towards real shareholder participation in contemporary corporate governance

Enhanced shareholder participation in large public companies in Australia has not gone far enough.&nbsp; Shareholders need to be given the opportunity to contribute to the forming of company decisions and strategies.&nbsp; One proposal is to require that directors themselves be shareholders. A second proposal mandates shareholder committees in public companies.<br /

Promoting More Socially Responsibly Corporations through a Corporate Law Regulatory Framework

This paper aims to lay the foundations for a more critical approach to the relationship between Corporate Social Responsibility (CSR) and corporate law. Limitations on legislative approaches including directors’ duties, information disclosure, sustainable decisions, direct promotion and corporate internal management structure are critically analysed, trying to find well thought-out and effectively implemented adjudication that provides meaningful instruction for regulating CSR. The article explores the manner in which corporate law may contribute to accommodating CSR principles within corporate strategies, in order to establish a transformative legal regulatory framework within corporate law by using the authoritative legal mode to promote corporate regulatory mechanisms. The article critically studies a few legislative measures supported by the relevant legislative experiences from various jurisdictions as examples of currently enforced CSR-laws at national level, in order to offer comprehensive and potentially effective legislative suggestions for accommodating CSR elements. However, a ‘one size fits all’ approach is clearly not desirable, and these suggestions should be interpreted and implemented in a locally relevant manner, according to path dependence theory

Positive Corporate Governance

Positive corporate governance is an ideology which casts corporate executives in a favourable light. This goes against the current grain of viewing corporate executives as greedy or even criminal. This article looks at various angles of positive corporate governance such as in regards to corporate regulation, education, and social capital

Directors\u27 duties to creditors in Australia after spies v the Queen

In August 2000, the High Court handed down its decision in Spies v The Queen . According to most commentators, the decision ended a &quot;quiet revolution&quot; which had been underway since Walker v Wimborne by rejecting the suggestion that directors owe an independent duty to creditors. In this article, the writer responds to this commentary in two ways. First, by contending that the High Court\u27s comments in Spies concerning directors\u27 duties to creditors were merely obiter, thereby leaving open the possibility that an independent duty to creditors will be confirmed in a subsequent case. Secondly, by suggesting that if the commentary to date is correct, then the Spies decision has minimal impact in terms of creditor protection as directors\u27 duties under the Corporations Act 2001 already provide sufficient protection for creditors. <br /

An introduction to CLERP 9

An Introduction to CLERP 9, as its title suggests, is aimed at providing legal practitioners and students with an overview of Australia&rsquo;s corporate governance reforms, but more than that, it also analyses the events that led to the reforms and provides practical examples of how the amendments will change corporate practices.The book begins by defining what is generally meant by good corporate governance. It then outlines the relevant recent events that led to introduction and commencement of the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (CLERP 9) on 1 July this year. The corporate failures of Enron and HIH &ndash; and subsequent Royal Commission &ndash; in 2001, and the failure of private auditing firms to warn of their client&rsquo;s problems are well summarised.As well as the Sarbanes Oxley Act of 2002, the US equivalent to CLERP 9, the establishment of the ASX Corporate Governance Council and the release of its Principles of Good Corporate Governance and Best Practice Recommendations are examined in detail.The book covers all the chief changes, including the new rules for audit independence, financial disclosure, whistleblowing, remuneration for directors and executives and continuous disclosure.Throughout, the book provides a comprehensive and easy to understand commentary on how the CLERP 9 Act alters the Corporations Act 2001 and the ASIC Act 2001, as well as highlighting important changes that affect present practice. For example, the author notes that under the auditor independence rules, when an audit firm contravenes an independence requirement, liability is placed on all members and directors of the audit firm, not just the lead auditor responsible for a particular audit. This, he says, is aimed at introducing a &ldquo;culture of compliance&rdquo;.As well as providing a quick reference guide to how the CLERP 9 Act amends the Corporations and ASIC Acts at the beginning of the book, the table at the end of the book comparing the corporate governance reforms in the US, UK and Australia will be very useful for practitioners trying to make sense of how multinational clients might be liable across different jurisdictions.<br /

Predatory pricing and the expectation of recoupment in Australia : Boral and the pathways forward

High Court decision, Boral v ACCC in which the Court overturned the decision of the Full Federal Court and held that Boral\u27s strategy of below cost pricing did not contravene s 46 of the Trade Practices Act - suggestion that the test of recoupment be the central test with respect to predatory pricing cases.<br /

The Separation of Ownership and Control under a Happiness-Based Theory of the Corporation

Explores the happiness-based theory of the corporation, suggesting that there is no conflict between the pursuance of economic and social objectives on the basis that their interplay is required to facilitate shareholder happiness. Considers: (1) the Berle-Means hypothesis and the separation of ownership and control, the dominant governance structure for large companies; (2) a happiness-based perspective on the separation; and (3) law reform applicable to a happiness-based theory. Argues that the separation of ownership and control is not in shareholders\u27 best interests because the structure is not conducive to the happiness of individual shareholders and should be reformed.<br /

Introducing personal liability under the continuous disclosure regime : The essentials and non-essentials

Under the Federal Government\u27s CLERP 9 legislation, expected at the time of writing to come into force in July 2004, personal liability will be introduced for the first time under the continuous disclosure regime. Individuals who are \u27involved\u27 in a failure to immediately disclose materially price sensitive information to the market will be subject to a civil penalty, in addition to the company being liable. According to the author, the introduction of personal liability per se is not contentious and indeed is a favourable change; what is questionable, however, is whether \u27involvement\u27 in a contravention is the appropriate test for imposing personal liability in relation to breaches of the continuous disclosure provisions. Based on the case law to date on the meaning of \u27involved\u27, there is particular uncertainty as to whether an individual would need to have actual knowledge that non-disclosed information is \u27materially price sensitive\u27 in order to satisfy the test of \u27involved\u27 in the context of continuous disclosure, or whether mere knowledge that the information has not been disclosed would be sufficient. This uncertainty arises due to the vague concept of \u27essential matters\u27 which the courts have developed as a test for what degree of knowledge a person needs to have in order to be \u27involved\u27. The author argues that all the confusion as to what \u27involved\u27 means could be addressed by removing the word \u27essential\u27 from the dialogue, so that the test of \u27involvement\u27 would simply be based on whether the particular person had actual knowledge of each of the factual elements constituting the offence.<br /

Shareholder Empowerment as an End in Itself: A New Perspective on the Allocation of Power in the Modern Corporation

Both advocates of greater shareholder power ("shareholder primacists") and advocates of retaining the status quo ("director primacists") consider shareholder participation as a means to an end, rather than an end in itself - that end being improved company performance